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Home Buyers Rebate Tax Credit Programs

Municipal and Federal Home Buyers Rebate Programs

 

The Government of Canada provides Canadian with a variety of home buyers rebates and tax credit programs. Each province is governed by its own specific rules and regulations, so check closely to see if you qualify.


The First-time Home Buyers Rebate and Tax Credit provides a rebate of $750. It is designed to help new home buyers increase their down payment by recovering costs associated with land transfer taxes, inspections, and legal fees. The credit must be claimed within the first year of purchase and it is non-refundable.

 

The Home Buyers’ Plan allows up to $25 000 to be withdrawn from your RRSP. Funds must be withdrawn within a single year and be used to buy or build a home for either yourself or a disabled relative. The funds are then repaid annually and recovered within a 15-year period. If you fail to make an annual payment, that amount will be counted as taxable income. Note that funds must be in the RRSP for a minimum of 90 days to qualify.

 

The GST/HST New Housing Rebate is designed to alleviate some of the costs associated with major home renovations and construction. It also applies to purchasing a new home from a developer or re-building in the event of a fire. The rebate reduces GST and the federal portion of HST from 5% to approximately 3.5% on homes valued at $350 000 or less. The rebate is reduced for homes valued at greater than $350 000, with a limit of $450 000. To qualify, the property must be a primary residence and applications submitted within the first two years of ownership.


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