Home Buyers' Tax Credit

The Home Buyers’ Amount (often called the Home Buyers’ Tax Credit) is a non-refundable tax credit available to eligible individuals who purchase their first home in Canada. Federally, the credit is designed to help new homeowners offset some of the closing costs associated with purchasing a home, such as legal fees, inspections, and moving expenses.

To qualify, the individual (or their spouse or common-law partner) must acquire a qualifying home, which generally includes a single-family home, townhouse, condominium, mobile home, or certain co-operative housing units located in Canada. The home must be intended as the buyer’s principal place of residence within one year of purchase.

To claim the federal credit, the individual must not have owned and lived in another home in the year of purchase or in any of the four preceding years, unless the purchase is made to accommodate a person eligible for the disability tax credit. In such cases, the home does not need to be the buyer’s first, provided it is more accessible or better suited to the individual’s needs.

The Home Buyers’ Amount provides a credit based on a $10,000 amount, resulting in a maximum federal tax savings of $1,500 (calculated as $10,000 × 15%). The claim is made on line 31270 of the federal T1 return. If more than one person is entitled to the credit for the same home, the total combined claim cannot exceed $10,000, and the amount may be split between eligible buyers as they choose.

In Quebec, a similar provincial non-refundable tax credit—the Tax Credit for the Purchase of a First Home—is available. This credit provides a 10% benefit on a maximum amount of $750, resulting in a maximum Quebec tax savings of $750 per qualifying buyer. The eligibility conditions generally mirror those of the federal credit: the buyer must be a first-time homeowner, must intend to occupy the home as a principal residence, and must purchase a qualifying property located in Quebec. The credit is claimed on line 396 of the TP-1 return.