The Home Buyer Tax Credit is a non-refundable tax credit that certain homebuyers can claim on qualifying homes purchased after January 27, 2009. This tax credit is calculated by multiplying the lowest personal income tax rate for the year (15% in 2014) by $5,000.
There are a few factors that will be considered to determine if you qualify for the full exemption. You must:
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Be a Canadian Citizen or permanent resident
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Have lived in BC for twelve months previous to registering the property or filed at least 2 income tax returns as a BC resident in the last 6 years
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Have never owned interest in a principal residence anywhere in the world
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Have never received a first time home buyer exemption or refund
There are also specific requirements in regards to the property. It must:
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Be located in BC
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Only be used as your principal residence
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Be 0.5 hectares (1.24 acres) or smaller
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Have a fair market value of:
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$425,000 or less, if registered on or before February 18, 2014 OR
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$475,000 or less, if registered on or after February 19, 2014
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Homes that qualify can be single-family or semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings. A share in co-operative housing that entitles you to possess and gives you equal interest in a unit also qualifies. However, a share that only provides you with tenancy does not qualify. Additionally, you must occupy the home as a principal place of residence no later than one year after it is acquired.
To apply for the First Time Home Buyer Tax Credit, you need to complete a First Time Home Buyer Property Transfer Tax Return when you or your legal representative register the property transfer. After applying, you must meet additional requirements during the first year of property ownership to maintain the tax exemption.
Are you considering purchasing your first home? Contact me today to discuss your real estate needs!