Buying a first home comes with a pile of costs that have nothing to do with the price of the house. The home buyers' amount is a non-refundable tax credit that helps first-time home buyers with some of those costs. It reduces the federal income tax you may owe, but you will not get a refund for this credit if you do not have any tax payable.
Who can claim it
Generally, you can claim the home buyers' amount if you meet all of the following conditions:
- you, or your spouse or common-law partner, acquired a qualifying home
- you did not live in another home, inside or outside Canada, that you or your spouse or common-law partner owned in the year of acquisition or in any of the four preceding years
That second condition is the first-time buyer test, and there is an exception to it below.
You must intend that you, or a related person with a disability, will occupy the home as a principal place of residence no later than one year after it is acquired.
What counts as a qualifying home
A qualifying home has to meet both of these conditions:
- it is registered in your name, or your spouse's or common-law partner's name, under the applicable land registration system
- it is located in Canada
It can be an existing home or a home under construction. These all count:
- a single-family house, a semi-detached house, or a townhouse
- a mobile home
- a condominium unit
- an apartment in a duplex, triplex, fourplex, or apartment building
- 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
A share in a co-operative housing corporation that only gives you the right to tenancy is not a qualifying home. No part of that purchase can be claimed here.
If you are not a first-time buyer
You do not have to be a first-time home buyer if either of the following applies:
- you are eligible for the disability tax credit
- you acquired the home for the benefit of a related person who is eligible for the disability tax credit
For this credit, a person with a disability is a person who is eligible for the disability tax credit for the year the home is acquired. That is the credit claimed using Form T2201, Disability Tax Credit Certificate.
Where you are relying on this exception, the purchase must be made to allow the person with the disability to live in a home that is more accessible or better suited to their needs.
Splitting the credit
If more than one person is eligible for the home buyers' amount for the same home, they can each claim part of it. The credit can be split between eligible spouses or common-law partners. It can also be split between any other eligible people who jointly acquired the home. Between them, they cannot claim more than the maximum credit for the year.
If only one spouse or common-law partner meets the conditions, only that person can claim the full amount. The credit cannot be split between spouses or common-law partners unless both are eligible.
What to keep
Do not send any supporting documents when you file your tax return. Keep them in case the Canada Revenue Agency (CRA) asks to see them later.
The CRA's page does not list which documents it would want, so keep the papers that show what the conditions turn on:
- that the qualifying home was acquired and is registered in your name, or your spouse's or common-law partner's name
- where the home is, since it has to be located in Canada
- if you are relying on the disability exception rather than being a first-time buyer, your eligibility for the disability tax credit for the year of acquisition
In practice these are closing and land registration papers rather than receipts. Dossier keeps them filed under the year you acquired the home, which is the year the claim belongs to.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.