First Time Home-Buyers’ Tax Credit

Matt Chan • March 17, 2016

Everything You Need to Know!

Have you heard about a First Time Home Buyers Tax Credit, but aren’t sure what it is or if you qualify? You are in the right place!

The Government of Canada recently published this video on their website to explain the First Time Home-Buyers’ Tax Credit. Watch the video or read the transcript below to see if you might be eligible to save up to $750 on your next tax return! Keep reading to view a Q&A from the Canada Revenue Agency site. 

Click here or the image below to open the video in a new window. 

Transcript

NARRATOR: Meet the Lees.

The Lees heard that the Government of Canada wants to help first-time home buyers with a tax credit and they’re excited to learn more!

They’ve just purchased their first home, and they can use some tax savings.

So how does it work?

The First Time Home Buyers’ Tax Credit is a non-refundable tax credit that you can claim if you bought a qualifying home.

A non-refundable tax credit reduces the federal income tax that the Lees have to pay.

However, if the total of their non-refundable tax credits is more than their federal income tax payable, the Lees won’t receive a refund for the difference.

So how do the Lees save this tax money?

The tax credit is based on $5,000. For 2015, their credit is 15%, the lowest personal income tax rate, times $5,000.

We’ll spare the Lees the math—the credit is $750,

maybe enough savings to hire student painters or buy that reclining chair they’ve been eyeing.

But what’s a qualifying home?

The home has to be in Canada, and can be new, or already built.

It can be a condominium, an apartment, a townhome, a detached, or semi-detached home.

It can also be a mobile home, or a share in a co-operative housing corporation if the share in the co-op gives you the right to own the unit.

And the home must be registered in Dave and / or Kim’s name.

Either Dave or Kim or both can make the claim, since the buyer and the buyer’s spouse or common-law partner qualify.

And people who buy their first home with their friends also qualify. No matter what, the combined total amount claimed can’t be more than $5,000.

But the credit is for first-time home buyers. Dave owned his apartment while he was in college.

Is he still eligible?

A buyer who has not owned a home in the year of purchase or in any of the last four preceding years qualifies. So Dave qualifies as long as he has not owned a home since 2010.

Kim’s aunt, who is disabled bought a home that will accommodate her disability. Kim is extra happy because her aunt can claim the Home Buyers’ Tax Credit as well.

People who are disabled, or buying the home for a disabled relative, also qualify for the credit, and it does not have to be their first home.

It must enable the person with the disability to live in a more accessible dwelling or in an environment better suited to their personal needs and care.

Dave and Kim are so excited to be saving money on their income tax! All they need to do is fill in the amount on Line 369 of Schedule 1, Federal tax and voila! Up to $750 saved.

Want to be like Dave and Kim?

Visit www.cra.gc.ca/hbtc for more information about the First Time Home Buyers’ Tax Credit.

From the Canada Revenue Agency

1. What is the home buyers’ tax credit (HBTC)?

For 2009 and subsequent years, the HBTC is 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., generally means that the closing is 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. Am I eligible for the HBTC?

You will qualify for the HBTC if:

you or your spouse or common-law partner acquired a qualifying home; and
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.
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 the 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 acquired after January 27, 2009. 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.

Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.

5. Who is considered a person with a disability for purposes of the HBTC?

For the purposes of the HBTC, a person with a disability is an individual who is eligible to claim a disability amount for the year in which the home is acquired, or would be eligible to claim a disability amount, if we ignore that costs for attendant care or care in a nursing home were claimed for the Medical Expense Tax Credit.

6. 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 your combined claims cannot exceed $750.

7. My friend and I intend to jointly 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 your combined claims cannot exceed $750.

8. Do I have to register the acquisition of the home under the applicable land registration system?

Yes. Your interest in the home must be registered in accordance with the land registration system applicable to where it is located.

9. How will I claim the HBTC?

Beginning with the 2009 personal income tax return, line 369 is incorporated into the Schedule 1, Federal Tax to allow you to claim the credit in the year in which you acquired the qualifying home.

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 Canada Revenue Agency (CRA).

11. Is the HBTC connected to the existing Home Buyers’ Plan?

No. Although some of the eligibility conditions for the HBTC and the Home Buyers’ Plan are similar, the two are not connected. Your eligibility for the HBTC will not change whether or not you also participate in the Home Buyers’ Plan.

12. Where can I get more information about the new HBTC?

The CRA encourages taxpayers to check its Web site often—all new forms, policies, and guidelines are posted there as soon as they become available.

13. In which taxation year can I claim the HBTC?

You can claim the HBTC in the taxation year in which the qualifying home is acquired.

14. If I purchase a condominium as my qualifying home in which occupancy takes place in one taxation year but the legal transfer of ownership only takes place in the subsequent taxation year, in which taxation year can I claim the HBTC?

You can claim the HBTC in the subsequent year in which your interest in the condominium (or a right in Quebec) will be registered in accordance with the land registration system or other similar system applicable where it is located.

CONTACT

Share

RECENT POSTS

Collateral vs. Standard Mortgage: Pros and Cons Explained

By Matthew Chan • December 17, 2025
Mortgage Registration 101: What You Need to Know About Standard vs. Collateral Charges When you’re setting up a mortgage, it’s easy to focus on the rate and monthly payment—but what about how your mortgage is registered? Most borrowers don’t realize this, but there are two common ways your lender can register your mortgage: as a standard charge or a collateral charge . And that choice can affect your flexibility, future borrowing power, and even your ability to switch lenders. Let’s break down what each option means—without the legal jargon. What Is a Standard Charge Mortgage? Think of this as the “traditional” mortgage. With a standard charge, your lender registers exactly what you’ve borrowed on the property title. Nothing more. Nothing hidden. Just the principal amount of your mortgage. Here’s why that matters: When your mortgage term is up, you can usually switch to another lender easily —often without legal fees, as long as your terms stay the same. If you want to borrow more money down the line (for example, for renovations or debt consolidation), you’ll need to requalify and break your current mortgage , which can come with penalties and legal costs. It’s straightforward, transparent, and offers more freedom to shop around at renewal time. What Is a Collateral Charge Mortgage? This is a more flexible—but also more complex—type of mortgage registration. Instead of registering just the amount you borrow, a collateral charge mortgage registers for a higher amount , often up to 100%–125% of your home’s value . Why? To allow you to borrow additional funds in the future without redoing your mortgage. Here’s the upside: If your home’s value goes up or you need access to funds, a collateral charge mortgage may let you re-borrow more easily (if you qualify). It can bundle other credit products—like a line of credit or personal loan—into one master agreement. But there are trade-offs: You can’t switch lenders at renewal without hiring a lawyer and paying legal fees to discharge the mortgage. It may limit your ability to get a second mortgage with another lender because the original lender is registered for a higher amount than you actually owe. Which One Should You Choose? The answer depends on what matters more to you: flexibility in future borrowing , or freedom to shop around for better rates at renewal. Why Talk to a Mortgage Broker? This kind of decision shouldn’t be made by default—or by what a single lender offers. An independent mortgage professional can help you: Understand how your mortgage is registered (most people never ask!) Compare lenders that offer both options Make sure your mortgage aligns with your future goals—not just today’s needs We look at your full financial picture and explain the fine print so you can move forward with confidence—not surprises. Have questions? Let’s talk. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you make smart, informed choices about your mortgage. No pressure—just answers.

Bank of Canada Rate Announcement Dec 10th, 2025

By Matthew Chan • December 10, 2025
Bank of Canada maintains policy rate at 2.1/4%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario December 10, 2025 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank’s October Monetary Policy Report (MPR). Canada’s economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility. Canada’s labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued. CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year’s GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is January 28, 2026. The Bank’s next MPR will be released at the same time.

Smart Strategies to Save for Your Down Payment

By Matthew Chan • December 3, 2025
How to Start Saving for a Down Payment (Without Overhauling Your Life) Let’s face it—saving money isn’t always easy. Life is expensive, and setting aside extra cash takes discipline and a clear plan. Whether your goal is to buy your first home or make a move to something new, building up a down payment is one of the biggest financial hurdles. The good news? You don’t have to do it alone—and it might be simpler than you think. Step 1: Know Your Numbers Before you can start saving, you need to know where you stand. That means getting clear on two things: how much money you bring in and how much of it is going out. Figure out your monthly income. Use your net (after-tax) income, not your gross. If you’re self-employed or your income fluctuates, take an average over the last few months. Don’t forget to include occasional income like tax returns, bonuses, or government benefits. Track your spending. Go through your last 2–3 months of bank and credit card statements. List out your regular bills (rent, phone, groceries), then your extras (dining out, subscriptions, impulse buys). You might be surprised where your money’s going. This part isn’t always fun—but it’s empowering. You can’t change what you don’t see. Step 2: Create a Plan That Works for You Once you have the full picture, it’s time to make a plan. The basic formula for saving is simple: Spend less than you earn. Save the difference. But in real life, it’s more about small adjustments than major sacrifices. Cut what doesn’t matter. Cancel unused subscriptions or set a dining-out limit. Automate your savings. Set up a separate “down payment” account and auto-transfer money on payday—even if it’s just $50. Find ways to boost your income. Can you pick up a side job, sell unused stuff, or ask for a raise? Consistency matters more than big chunks. Start small and build momentum. Step 3: Think Bigger Than Just Saving A lot of people assume saving for a down payment is the first—and only—step toward buying a home. But there’s more to it. When you apply for a mortgage, lenders look at: Your income Your debt Your credit score Your down payment That means even while you’re saving, you can (and should) be doing things like: Building your credit score Paying down high-interest debt Gathering documents for pre-approval That’s where we come in. Step 4: Get Advice Early Saving up for a home doesn’t have to be a solo mission. In fact, talking to a mortgage professional early in the process can help you avoid missteps and reach your goal faster. We can: Help you calculate how much you actually need to save Offer tips to strengthen your application while you save Explore alternate down payment options (like gifts or programs for first-time buyers) Build a step-by-step plan to get you mortgage-ready Ready to get serious about buying a home? We’d love to help you build a plan that fits your life—and your goals. Reach out anytime for a no-pressure conversation.