Who Can Benefit From the Home Buyers’ Tax Credit (HBTC)?

Buying your first home is exciting! And it’s also likely the largest financial transaction you’ll make throughout your lifetime. That’s why it’s important to take advantage of all incentives and credits available to help you save money. The First-Time Home Buyers’ Tax Credit (HBTC) is offered by the federal government to help offset closing costs associated with buying your home. (See: What is the First-Time Home Buyer’s Tax Credit?)

Important: You must apply to receive the credit on the tax return in the same year in which you purchase a home.

Key Takeaways

• The HBTC allows first-time home buyers to claim up to $10,000 on personal tax returns, resulting in up to a $1,500 rebate
• A qualifying home must be registered in your or your spouse’s/common-law partner’s name in accordance with the applicable land registration system and must be located in Canada
• You can also qualify for this tax credit and not be a first-time home buyer if you’re a home buyer who’s eligible for the disability tax credit or you acquired the home for the benefit of a related person who’s eligible for the disability tax credit

Who can benefit from the home buyers’ tax credit?

The HBTC allows you, as a first-time home buyer, to claim up to $10,000 on your personal tax return, resulting in up to a $1,500 rebate. You must apply to receive the credit on the tax return in the same year in which you purchase a home.

You can claim up to $10,000 for the purchase of a qualifying home if both of the following apply:

• you or your spouse/common-law partner acquired a qualifying home
• you didn’t live in another home owned by you or your spouse/common-law partner in the year of the acquisition or in any of the four preceding years (first-time home buyer)

You can also qualify for this tax credit and not be a first-time home buyer if either of the following applies:

• you’re a home buyer who’s eligible for the disability tax credit 
• you acquired the home for the benefit of a related person who’s eligible for the disability tax credit

Which homes qualify for the HBTC?

A qualifying home must be registered in your or your spouse’s/common-law partner’s name in accordance with the applicable land registration system and must be located in Canada. This includes both existing homes and homes under construction.

The following are considered qualifying homes:

• single-family houses
• semi-detached houses
• townhouses
• mobile homes
• condominium units
• apartments in duplexes, triplexes, fourplexes or apartment buildings

How’s the tax credit calculated?

The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2020) by $10,000 – 15% X $10,000 = $1,500.

Is the HBTC connected to the First-Time Home Buyers’ Plan?

No. They’re two completely separate programs, so you can participate in both if you qualify. The Home Buyers‘ Plan (HBP) allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or a related person with a disability. To qualify, RRSP funds must be in your RRSP for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.

Tip: You and your spouse/common-law partner can split the claim, but the combined total can’t exceed $10,000.

How do I claim the home buyers’ amount?

You must apply to receive the credit on the tax return in the same year in which you purchase a home. When completing your tax return, enter $10,000 on line 31270. You and your spouse/common-law partner can split the claim, but the combined total can’t exceed $10,000.

Other articles in this guide: “First-Time Home Buyer Mortgage Guide”

• What is the First-Time Home Buyers’ Tax Credit?
• What is the RRSP Home Buyers’ Plan (HBP)?
• First-Time Home Buyer Land Transfer Tax Rebates Across Canada
• First-Time Home Buyer Programs in Canada
• First-Time Home Buyer Grants in Canada
• First-Time Home Buyer Loans in Canada