Buying your first property can be an exciting time for those that have made the decision to move. If you’re about to purchase your first home, you might be wondering how the transaction will affect your taxes in the coming year. One new incentive program, introduced by the Canadian government in 2009 as a way to boost flagging property sales within the real estate market, could offer a way for first-time homebuyers to gain some money back on the real estate purchase.
The First Time Home Buyers’ Tax Credit is designed to help first time buyers recover closing costs such as spending on legal fees and land transfer taxes. At current taxation rates in Ontario, the first-time Buyers’ tax credit equals around $750 per homebuyer.
In order to receive this amount, there a number of specific parameters you must first meet. These are as follows:
- Your home must be in Canada
- It must be an existing or new home
- It must be a single, townhouse, mobile home, condo or apartment.
- You must intend to occupy the home within one year of purchase
As this process is intended for specific homebuyers, there are also a number of rules concerning who can apply for the First Time Home Buyers’ Tax Credit. The restrictions who can apply are as follows:
- Your or your spouse must purchase a home qualified under program stipulations
- You must present documents to the government concerning the purchase of your home
- You cannot have owned a home in the previous four years
- You cannot have lived in a home owned by your spouse in the previous four years
- Your home must be registered in either you or your spouse’s name
Important Information for Those with Disabilities
If you have a disability and are in the process of purchase a home, you do not have the be a first time homebuyer in order to claim the First Time Home Buyers’ Tax Credit on next year’s tax forms. In this instance, you are considered to have a disability if you are eligible to claim a disability amount on your tax return in the year of your home purchase.
Those who are purchasing a home that is designed to meet a disabled person’s needs may also be eligible for the First Time Home Buyers’ Tax Credit if the disabled person occupies the property within one year of purchase.
Keep Hold of ALL Documentation!
Ensure that you keep all important information concerning your home purchase in a safe place. All receipts, warranties and property transfer information will likely be required by your accountant or tax professional in tallying the amount of tax that you are owed as a result of the purchase.
If you have any questions in regards to first time home buyer’s tax credit in Toronto area, please fill out the form bellow – I respond to ALL inquiries!