BY PAM PIKKERT
Did you buy a house last year?
If so we have some good news for you, my friend.
As you busily gather your T4s and all the other hoopla required to complete your 2013 taxes on time, make sure to let your tax professional know of your purchase.
The Government of Canada, since 2009, has offered a tax credit just for nice folks like you and we don’t want you to miss out.
It is the First Time Home Buyers Tax Credit.
So you say, “Hey, I bought a home. How in the heck does this all work?”
The First Time Home Buyer’s tax credit can be claimed as a non-refundable tax credit if you purchased what the government considers a qualifying home.
A non-refundable tax credit will reduce the amount of federal tax you have to pay. Hooray!
The tax credit can be claimed equally by either you or your spouse or common-law partner. It can also be split between friends who are purchasing a home together.
You should note that if the total of your non-refundable tax credits is more than your federal income tax, you will not receive the difference.
So what makes a qualifying home according to our federal government?
It must be registered in your name and/or your spouse’s or common-law partner’s as per provincial law.
It must be located in Canada. It can be a new home or a home currently being built.
Examples of eligible properties include single-family homes, semi detached homes (like a duplex), a townhouse, a mobile or modular home, a condominium or an apartment.
So you think that you are eligible? Now what?
All you need to do, or have your tax professional do, is enter the amount up to $5,000 on line 369 of Schedule 1 and next thing you know, Bob’s your uncle, and you save up to $750!
This $750 non-refundable credit is the total that can be claimed by all of the parties combined.
But wait you say? You used to own a home but it has been awhile?
Good news for you too. If you have not owned a home any time in the last four years, you are fully able to take advantage of this tax rebate.
An important thing to note is in regards to persons with disabilities.
This same credit applies to people in the following situations when purchasing a home – people who are disabled or are purchasing a home for a disabled relative will also qualify for this tax credit even if it is not their first purchase.
The new home must also enable the person with the disability to have a more accessible dwelling or be in an environment better suited to their needs.
There are some other restrictions in regards to those purchasing the home for a person with a disability so I strongly recommend seeking out professional advice.
Looking for more information? Here is a link with more information about the First Time Home Buyer’s Tax Credit – www.cra.gc.ca/hbtc
There are some videos on the site, as well as some further links so that you can see if you can qualify for this tax credit. Money in your pocket is always better than in the government’s coffers!
Pam Pikkert is a mortgage broker with DLC Regional Mortgage Group in Red Deer.