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1. What is the Home Buyers' Tax
Credit (HBTC)?
For 2009 and subsequent years, the budget
proposes to introduce a new non-refundable tax credit, based on an amount of
$5,000, for certain home buyers that acquire a qualifying home after January 27,
2009 (i.e., closing after this date).
2. How is the new HBTC calculated?
The HBTC is 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.
3. Who is eligible for the HBTC?
An individual will qualify for the HBTC if:
- they acquire a qualifying home; and
- neither the individual nor the individual’s
spouse or common-law partner owned and lived in another home in the year of
purchase or any of the four preceding years.
If you are a person with a disability or are
buying a house for a related person with a disability, you do not have to be a
first time home buyer. However, the home must be acquired to enable the person
with a disability to live in a more accessible dwelling or in an environment
better suited to the personal needs and care of that person.
4. What is a qualifying home?
A qualifying home is 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, and
apartments in duplexes, triplexes, fourplexes, or 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.
As well, you or the related person with a
disability must intend to occupy the home as a principal place of residence no
later than one year after buying it.
5. If I buy a house, can my spouse or
common-law partner claim the HBTC?
Either one of you can claim the credit or you can
share the credit. However, the total of both your claims cannot exceed $750.
6. My friend and I intend to purchase a
home, and we both meet the conditions for the HBTC. Can we both claim the
credit?
Either one of you can claim the credit or you can
share the credit. However, the total of both your claims cannot exceed $750.
7. Do I have to register the acquisition
of the home under the applicable land registration system?
Yes. The individual's interest in the home must
be registered in accordance with the applicable land registration system.
8. Who is considered a person with a
disability for purposes of the HBTC?
For the purposes of the HBTC, an individual
eligible for the
Disability Tax Credit (DTC) is one for whom an amount can be claimed under
the DTC for the year in which an agreement to acquire the home is entered into,
or could be claimed if costs for an attendant care or care in a nursing home
were not claimed for the [Medical
Expense Tax Credit].
9. How will I claim the HBTC?
Beginning with the 2009 personal income tax
return, a new line will be incorporated to allow you to claim the credit.
10. Do I have to submit any supporting
documents with my income tax return?
No. However, you must ensure that this
information is available, should it be requested by the CRA.
11. Is the HBTC connected to the existing
Home Buyer's Plan?
No. Although some of the eligibility conditions
for the HBTC and the Home Buyer's Plan are similar, they are not connected. Your
eligibility for the HBTC will not change whether or not you also participate in
the
Home Buyer's Plan.
12. Where can I get more information
about the new HBTC?
The CRA encourages taxpayers to check our Web
site often - all new forms, policies, and guidelines will be posted here as they
become available.
Documents are also available immediately at
Department of Finance's Budget 2009 for details. |
