If you are considering buying a new home or resale home in Canada, as a first time homebuyer, you should be aware that you may be entitled to a refund of up to $750 on your tax return. This refund is known as the First Time Home Buyers Tax Credit (HBTC).
You are considered to be a first time home buyer if neither yourself or your spouse or common law partner owned and lived in a home in the year of your purchase or any of the four prior calendar years and the home must be used as your principal residence up to one year after its purchase.
There are special rules for people with disabilities and for people acquiring a home for a related person with a disability which may allow you to claim the $750 even if it is not your first time home.
You may also be entitled to a refund of up to $2,000 of the Ontario land transfer tax paid if you are a first time home buyer as well as refund of up to $3,725 for any Toronto Land Transfer tax.
The Home Buyers Plan (HBP) allows you to take up to $25,000 out of your RRSP to buy or build a qualifying home for yourself or a related person with a disability. The funds are withdrawn from your RRSP tax free and without any interest costs, and they have to be repaid annually to your RRSP within a 15 years period. If you do not repay the amount each year then you have to include the required repayment in income each year on your personal tax return.
Also If you are purchasing a new home you may be entitled to a GST/HST new housing rebate of nearly $40,000 if your property cost less than $450,000 or up to $24,000 for properties costing more than $450,000.
The above are just some of the potential tax savings available to you. This is just one of the many reasons to use your Toronto Accountant to ensure that you are taking full advantage of the tax credits and rebates which you are entitled to. If you need assistance with your tax matters contact Sam Seidman, CA at 416-398-1700 or fill out the contact form on the right hand side.
