$$Every dollar counts when purchasing a home$$

Raising children, buying a home, changing careers or just keeping up with the bills is not always easy. There are many benefits, credits and programs available to help you. Find out which ones you may be eligible for.

When Buying a home:

Whether you are buying your first home (congratulations!), buying a new home or renovating your current home, there is a program to help.

What is the Home Buyers' Plan (HBP)?

The Home Buyers' Plan (HBP) is a program that allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a home for yourself or for a related person with a disability. Budget 2019 increased the HBP withdrawal limit to $35,000. This applies to withdrawals made after March 19, 2019.

 

First-Time Home Buyer Incentive – lowers your monthly mortgage payments on your first home

First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable.

 

The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity mortgage. This means that the government shares in the upside and downside of the property value. It allows you to borrow 5 or 10% of the purchase price of a home. You pay back the same percentage of the value of your home when you sell it or within a 25-year window.

It works like this:

  • You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
  • You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.

Just as the name implies, this incentive is for first-time homebuyers. You’re considered a first-time homebuyer if:

  • You have never purchased a home before
  • You did not occupy a home that you or your current spouse or common-law partner owned in the last 4 years (the 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded)
  • You have recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements)

 

GST/HST new housing rebate – Gives you back some of the GST/HST paid on a home

Eligibility for the GST/HST new housing rebate

You may be eligible for a new housing rebate for some of the GST/HST paid if you are an individual who:

  • Purchased new or substantially renovated housing from a builder, including housing on leased land (if the lease is for at least 20 years or gives you the option to buy the land) for use as your (or your relation’s) primary place of residence
  • Purchased shares in a co-operative housing corporation (co-op) for the purpose of using a unit in a new or substantially renovated cooperative housing complex for use as your (or your relation’s) primary place of residence
  • Constructed or substantially renovated your own home or hired someone else to construct or substantially renovate your home for use as your (or your relation’s) primary place of residence, if the fair market value of the house when the construction is substantially completed is less than $450,000

If you are an individual who purchased a new or substantially renovated mobile home (including a modular home) or a new or substantially renovated floating home for use as your (or your relation’s) primary place of residence, you may be eligible for a new housing rebate for some of the GST/HST paid. In addition, for the purpose of claiming the GST/HST new housing rebate, you may have the option to treat the home as being purchased from a builder or as being an owner-built house.

GST/HST new housing rebates you can claim

The GST/HST new housing rebate allows an individual to recover some of the GST or the federal part of the HST paid for a new or substantially renovated house that is for use as the individual's, or their relation's, primary place of residence, when all of the other conditions are met. In addition, other provincial new housing rebates may be available for the provincial part of the HST whether or not the GST/HST new housing rebate for the federal part of the HST is available.

The new housing rebate is not available to a corporation or a partnership.

 

Documents you have to send

 

In most cases, you do not have to send supporting documents with your GST/HST new housing rebate application. However, you do have to send invoices with your worksheet if the vendor did not charge the GST/HST on the invoice (photocopies of these invoices will be accepted). The CRA may contact you to ask for proof of occupancy.

Documents you have to keep

Keep a copy of the filled-out forms. You also have to keep all your original invoices and documents you used to fill out the forms for six years in case the CRA asks to see them.

Only original invoices in the name of the claimant or the co-owners are acceptable. The CRA does not accept photocopies, credit card or Interac slips, or account statements, without the original invoices. The CRA does not accept estimates or quotes as proof. If the CRA asks you to send your invoices, they will be returned.

 

Home buyers’ amount – reduces your income taxes by providing a credit for the purchase of a home

You can claim $5,000 for the purchase of a qualifying home in the year if both of the following apply:

  • 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)