First Time Home Buyers Amount
The Home Buyers’ Amount (HBA) is a non-refundable tax credit available to first-time home buyers in Canada.
What is the Home Buyers’ Amount?
The HBA was first introduced in 2009, allowing first-time or disabled home buyers to claim an amount up to $5,000 on their returns. But in 2022, that amount doubled to $10,000. The HBA is calculated by applying Canada’s lowest personal income tax rate of 15% to $10,000, which works out to a non-refundable tax credit of up to $1,500.
Eligibility for the Home Buyers’ Amount
To be eligible for the HBA, you or your spouse or common-law partner must have acquired a qualifying home in Canada in the previous year. You did not live in another home inside or outside Canada that you (or your spouse or common-law partner) owned in the year of acquisition or in any of the four preceding years.
Benefits of the Home Buyers’ Amount
The HBA offers several benefits to first-time home buyers:
- Tax Savings: The HBA can reduce your federal tax by up to $1,500.
- Flexibility: The HBA can be claimed by you or your spouse or common-law partner, or can be split between you.
- Accessibility: The HBA is available to disabled home buyers, even if they are not first-time home buyers.
How to Claim the Home Buyers’ Amount
To claim the HBA, you need to enter $10,000 on line 31270 of your tax return. If you and your spouse or common-law partner are splitting the amount, enter your share of the $10,000 on your respective tax returns.
Real-Life Example of Using the Home Buyers’ Amount
Let’s say you’re a first-time home buyer who earns $50,000 per year. You buy a qualifying home and decide to claim the HBA on your tax return. You enter $10,000 on line 31270 of your tax return, which gives you a non-refundable tax credit of $1,500 (15% of $10,000). This reduces your federal tax by $1,500.
The Home Buyers’ Amount is a valuable tax credit that can provide significant financial relief to first-time home buyers in Canada. It’s one of the many ways the Canadian government is working to make homeownership more affordable and accessible.
Contact TheBroker.ca Ltd for More Information
Navigating the home buying process can be complex, but with the right guidance and information, it can be a rewarding experience. Don’t go through the mortgage process alone. Contact TheBroker.ca Ltd. today for a free consultation! We can offer you helpful advice on getting a mortgage, current mortgage rates, and assist you every step of the way. For any questions or further assistance, feel free to reach out to us via our website or call us at (519) 252-9665. Your path towards homeownership starts here. Let us be your guide.
Please note that this information is current as of the time of writing and is intended for general informational purposes only. It should not be relied upon as financial advice. Always consult with a mortgage professional for advice tailored to your specific circumstances.
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