Understanding How The Ontario Income Tax Credit Applies To First Time Home Buyers
At Blackburn Lawyers, we understand how different financing arrangements suit different clients’ backgrounds and financial history. Based in Richmond Hill, Ontario, we can help you make sense of the options available to you from your bank, including how the Ontario Income Tax Credit may apply to your transaction.
To be considered a first-time home buyer both of the following points must apply to you:
- You or your spouse or common-law partner acquired a qualifying home.
- You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).”
To further explain the definition, “To qualify as a first-time homebuyer, the taxpayer’s spouse or common-law partner must not have owned another home in which the taxpayer lived either in the year of purchase or any of the four preceding years. So, a taxpayer could qualify for the amount, even though his or her spouse or common-law partner owned a house during the preceding four years, as long as he or she did not live in it while they were married or common-law. So, a husband may not qualify as a first-time homebuyer but a wife could – or vice versa.”
Determine If Your Home Meets The Criteria For The Tax Credit
A qualifying home must be registered in your and/or your spouse’s or common-law partner’s name in accordance with the applicable land registration system, and must be located in Canada. It includes existing homes and homes under construction. The following are considered qualifying homes:
- Single-family houses
- Semi-detached houses
- Mobile homes
- Condominium units
- Apartments in duplexes, triplexes, fourplexes, or apartment buildings.
A share in a co-operative housing corporation that entitles you to own and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only gives you the right to tenancy in the housing unit does not qualify.”
Qualifying For The Disability Amount
If you are eligible for the disability amount or you are purchasing a home for a related person who is qualified for the disability amount you will qualify for this tax credit without being a first-time home buyer as defined above. However, “it must enable the person with the disability to live in a more accessible dwelling or in an environment better suited to their personal needs and care.”
You must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.
The claim can be split between you and your spouse or common-law partner, but the combined total cannot exceed $5,000.
When more than one individual is entitled to the amount (for example, when two people jointly buy a home), the total of all amounts claimed cannot exceed $5,000.
For complete information please contact the Canada Revenue Agency.
Have more questions? Get them answered by Blackburn Lawyers
Call our real estate lawyers at (905) 884-9242 or arrange a meeting using our online form.