If you're a Canadian who has recently purchased or is considering buying their first house, you should know about the First-Time Home Buyers' Tax Credit (HBTC). Buying a house is expensive, but this credit program allows you to claim up to $10,000 on your tax return – for a maximum $1,500 rebate.
There are a few guidelines regarding which types of homes qualify for this tax credit, but nearly all are covered. Either you or your spouse/partner can claim it, or even both of you, as long as you don't exceed the $10,000 limit.
We've put together this guide to lay out all the information on the HBTC program for you.
Key Takeaways
- The First-Time Home Buyers' Tax Credit allows qualified individuals to claim up to $10,000 of the related expense for a rebate of up to $1,500.
- The new home in question must be registered in yours or your spouse/partner's name and it must be your main residence.
- Those receiving the disability tax credit may qualify even if the home isn't their first, or if you're purchasing a home on behalf of someone receiving the DTC.
- To take advantage of this, you simply claim the amount on line 31270 of your tax return.
- Other incentives for first-time home buyers in Canada include the Home Buyers' Plan and FHSAs.
How to qualify for the HBTC
The Home Buyers Tax Credit eligibility isn’t complicated – it addresses who's buying the home and whether you intend to live there:
- The home must be in Canada and can be either a new construction or an existing structure.
- The home must be registered in your name, or the name of your spouse/common-law partner.
- You must intend to live in the home as your main residence within a year after you acquire it.
Who qualifies as a first-time home buyer?
The phrase "first-time home buyer" may sound self-explanatory, but there are some expanded definitions to consider. You're eligible for this tax credit if you are the one buying their first home, but you're also eligible if:
- You’re not the home buyer, but your spouse/common-law partner is
- You're a first-time home buyer, but your spouse/common-law partner isn't
- You and/or your spouse/partner haven't occupied a home you owned in the past four years
- You’re receiving the disability tax credit (DTC) or you’re buying the home to improve the life of a relative receiving the DTC
Ending a marriage or partnership can affect your eligibility. If you've recently lived in a home with your ex-spouse/partner and they were the homeowner, you won't qualify for the HBTC until four years after you move out.
Can two people claim the HBTC?
Yes, you can split the HBTC between yourself and your spouse/partner, but your combined claim can't be more than $10,000. Even if you're buying the house together and contributing equal finances, your claim can't exceed $10,000.
You'll find information regarding how to make this claim in a following section.
Which homes qualify for the First-Time Home Buyers’ Program?
The CRA lists the types of homes that qualify for the HBTC, which include:
- Single-family houses
- Semi-detached houses
- Townhouses
- Mobile homes
- Condos
- Apartments
- Shares in a housing cooperative (as long as it gives you ownership and equity interest)
That sums up most housing options, so chances are that your home will qualify as long as it's your first home and is located in Canada.
How to claim the First-Time Home Buyers' Tax Credit in Canada
Claiming the First-Time Home Buyers' Tax Credit in Canada is easy – just claim the amount on line 31270 of your tax return. So for last year's tax return, you would've put $10,000 on that line and call it a day.
You can also split the tax credit between yourself and your spouse or common-law partner. Just make sure the total amount that you claim isn't more than the max ($10,000).
For more information, see: Line 31270 - Home buyers’ amount.
More first-time home buyer incentives
The Canadian government has other incentives to help first-time home buyers, including a new savings plan designed specifically for first-time home buyers in Canada.
The Home Buyers' Plan (HBP)
The Home Buyers' Plan allows you to withdraw up to $35,000 from your RRSP without facing tax consequences – potentially another $35,000 too, if your partner has a spousal RRSP.
Remember – you have to repay what you withdrew within 15 years, and your first payment is due during year two. If you don't meet the yearly minimums, you'll have to include the difference as RRSP income on your tax return (which means you'll be taxed on that amount).
The First Home Savings Account (FHSA)
First introduced in April of 2023, the First Home Savings Account, or FHSA, is a registered account allowing you to save up to $40,000 tax-free for the purchase of a home. It operates similarly to RRSPs and TFSAs with annual contribution limits and the ability to carry forward your unused contribution room.
The EQ Bank FHSA Savings Account is one of the best FHSAs available in Canada, offering 1.5% interest on your savings and the option to buy even higher-rate GICs.
First Home Savings Accounts (FHSAs) promise to make saving for your first home easier by letting you put away up to $40,000 tax free. And EQ Bank FHSA Savings Account promises to help you get there faster by letting you earn up to 1.5% interest on your balance. This stable interest rate is ideal for home buyers who are thinking in the short term.
- Earn 1.5% tax free interest on your balance
- Next-to-no risk investment
- High-rate EQ Bank FHSA GICs also available
- Not available in Quebec
- No welcome offer
- You can’t hold any other investments besides GICs
- First-time home buyer
- Canadian resident (not in Quebec)
- 18 years or older
- Non-Cashable
Home Accessibility Tax Credit
The Home Accessibility Tax Credit (HATC) is a non-refundable tax credit to help eligible seniors and Canadians living with disabilities make their homes safer.
The HATC allows qualifying individuals to claim up to $20,000 in eligible renovation expenses, providing a tax credit of up to $3,000.
FAQ
What is the Home Buyers' Tax Credit in Canada?
The HBTC is a federal non-refundable tax credit meant to help ease the burden of buying a home for Canadians. All you have to do is claim it on your tax return the year you buy your new home.
How much is the Home Buyers' Tax Credit in Canada?
You can claim up to $10,000 with the Home Buyers' Tax Credit on your T1, which means a maximum rebate of $1,500. The claim can be split with your spouse/partner, but can't exceed the $10,000 limit.
Who qualifies for the first time home buyer tax credit in Canada?
You may qualify as a first-time home buyer if neither you nor your spouse has owned a home in the past four years. If it's your spouse's first home purchase, you both qualify. These rules apply if you’re requalifying too.
How much do you get back in taxes for first-time home buyers in Canada?
You can claim up to $10,000 on your taxes and receive a rebate of up to $1,500 via the First-Time Home Buyers' Tax Credit. The Home Accessibility Tax Credit offers a tax credit of up to $3,000.
How can I get a $10,000 tax refund in Canada?
It's very difficult to get a $10,000 tax refund. However, you can claim up to $10,000 as part of the First-Time Home Buyers' Tax Credit and receive a rebate for as much as $1,500.
What is the First Time Home Buyer Incentive in Canada?
The First Time Home Buyer Incentive was a federal government program that helped first-time home buyers with their down payment, thereby lowering their monthly mortgage payments. The program stopped accepting applications and closed in March of 2024.
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