If you or your co-applicant (e.g. spouse) are buying a real estate property for the first time, you are eligible to claim a number of benefits in Canada. The exact numbers may or may not be up to date, so please make sure that you verify those with your accountant, realtor, and/or real estate lawyer.
First-Time Homebuyer Tax Credit
The federal government offers a $5,000.00 non-refundable tax credit for first-time homebuyers, which can translate into a total of $750.00 in tax rebate when you file for your personal income tax. To claim this tax credit, you will need to simply fill in $5,000.00 on the "Home Buyers' Amount" line (Line 31270, or Line 369 before the tax year 2019) of your Schedule 1 in your tax return file.
The provincial government offers a $750 tax credit for first-time homebuyers in Quebec. The property must be in Quebec.
First-Time Homebuyer Incentive
This incentive allows you to borrow up to 10% of the total cost of the property from the CMHC (Canadian Mortgage and Housing Corporation) for 25 years interest-free. However, the amount you need to pay back fluctuates with the value of the property.
For example, if you bought a home worth $600,000 today with a 10% down payment of $60,000, you can borrow the other 10% from CMHC, increasing your down payment to 20%. When you decide to pay back CMHC, if your home is now worth $800,000, you will need to pay back $80,000. Vice versa, if your home is now worth $500,000, then you will only need to pay back $50,000.
Additional qualifications include:
Land Transfer Tax Rebate
Some provinces in Canada offer Land Transfer Tax Rebate to first-time homebuyers.
GST/HST New Housing Rebate
The federal government offers rebate programs if you have paid GST or HST when purchasing your home as a first-time homebuyer. You can claim the rebate by filing Form GST191 in your tax return.
Home Buyers' Plan
If you have money in your RRSP, the federal government allows you to borrow up to $35,000 from your RRSP account as a first-time homebuyer. You must repay the total amount into RRSP within 15 years. Repayments do not affect your RRSP deduction limit, and you cannot claim repayments as RRSP contributions for tax deductions.
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