Many taxpayers are unaware of a federal bonus available if you are buying a home and do not currently own one.
Section 118.05 of the Income Tax Act provides the “first-time home buyer’s credit”. You do not actually have to be a first-time buyer. Rather, you and your spouse (or common-law partner) must not have owned a home during the past 4 calendar years or in the current year.
Any home will qualify: detached house, semi-detached, townhouse, condominium unit, residential co-op share, or mobile home. You have to intend to live in the home as a “principal place of residence” within a year after acquiring it. The home need not be newly constructed.
For the year in which your purchase closes, you can claim a federal credit of $750 against your federal income tax. This is claimed as an amount of $5,000 on Line 369 on Schedule 1 of your return. (It is then totalled with other amounts and multiplied by 15% to become part of your federal “non-refundable tax credits”.)
You and your spouse (or common-law partner) can claim only one such credit between you. But either of you can claim the credit (no matter who takes title to the home), so if one of you does not have enough tax payable for the year for the credit to be useful, the other should claim the credit.
So if you are in the market to buy a home and have not recently owned one, you can budget for this $750 bonus!
For more information, see cra.gc.ca/hbtc