In the federal budget for 2009 the Harper government enacted a couple of measures to get the economy moving after the devastation of September 2008.
The first one was a renovation tax credit, whereas if you had completed some qualifying renovations during the allotted time period you will get a credit for your expenditures up to a certain dollar amount. The second program was called the ‘First-time home buyers’ tax credit’ (HBTC) whereas if you bought your first home you would be entitled to a $750 tax credit.
The programs, as understood by most in my office, were slated to end Jan. 31, 2010…but one has remained intact.
As the fact sheet found on Canada Revenue Agency’s website states, there is still a First-time home buyer’s tax credit available “for certain homebuyers who’ve acquired a home after Jan. 27, 2009, that is – closing after this date.” The tax credit still stands at $750, and if you qualify you’ll receive it.
The fact sheet says “It’s calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000.
For 2009, the credit will be $750. However, if the total of your non-refundable tax credits is more than your federal income tax, you will not receive a refund for the HBTC. The figures aren’t available for the 2010 tax year, but according to one of my clients their accountant said the amount hasn’t changed.
The program also states that “You will qualify for the credit if you or your spouse or common-law partner acquired a qualifying home; and you did not live in another home owned by you or your spouse or common-law in the year of acquisition or any of the four preceding years. Also if you are a person with a disability or are buying a home for a related person with a disability, you do not have to be a first time homebuyer to get the HBTC. However, the home must be acquired to enable the person with the disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.”
A qualifying home is described as a housing unit located in Canada.
This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, as well as apartments in duplexes, triplexes, fourplexes and apartment buildings all qualify.
A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
An important thing to remember is that the home must be registered in your or your spouse’s or common-law partner’s name in accordance with the applicable land registration system.
It’s not every year the government provides special programs like these, so if you qualify, make sure you get your credit! Please check with your accountant to ensure you qualify or visit www.cra.gc.ca/hbtc for more information.
Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments at 403-343-1125, texted to 403-391-2552 or emailed to email@example.com.