Since 2009, the federal government has offered a tax credit for First-Time Home Buyers as part of its efforts to encourage homeownership and construction across the country.
In Quebec, a similar tax credit was introduced by the provincial government for the 2018 tax year. As a result, Quebec residents can claim two separate tax credits, along with the deduction of taxes, when purchasing their first home or another eligible residence on their income tax return.
In this article, we will explore the details of these tax credits and the eligible amounts at both the federal and provincial levels.
The First-Time Home Buyers’ Tax Credits (FTHB)
These non-refundable tax credit, available at both the federal and provincial levels, are designed to support first-time home buyers by helping with the costs related to purchasing a property.
With expenses like inspection fees, appraisal fees, notary fees, moving costs, and other associated costs, these tax credits provide valuable assistance to ease the financial burden of buying a home.
The federal tax credit
Here is what you need to know about accessing the federal tax credit.
Who qualifies for the First-Time Home Buyers' tax credit?
To be eligible for the non-refundable federal tax credit, you must meet the following conditions:
- You must not have owned a property in the current year or the previous four years.
- The property must be used as your principal residence within one year of purchase.
Please note that only principal residences are eligible for this tax credit; therefore, purchasing a second home does not qualify.
Which types of homes are eligible?
The federal tax credit applies to the following types of properties:
- Single-family homes
- Semi-detached homes
- Townhouses
- Mobile homes
- Condominiums
- Apartments in a duplex, triplex, quadruplex or apartment building.
The property can either be an existing home or one that is currently under construction.
What is the maximum value of the First-Time Home Buyers’ Tax Credit?
For 2022 and subsequent years, the First-Time Home Buyers' Tax Credit is valued at $1,500 for Canadian citizens. In previous years, the amount was $750.
In Quebec, however, the credit is $1,252.50 due to the federal rebate for Quebec residents. This amount is calculated by multiplying the credit amount ($10,000) by the lowest personal income tax rate for the year (15%), resulting in a maximum credit of $1,500, which is then reduced to $1,252.50 by the 16.5% federal rebate for Quebec residents.
If multiple individuals jointly purchase a property, they will share the tax credit, which cannot exceed $1,500 or $1,252.50 in total. The First-Time Home Buyers' Tax Credit must be claimed within the tax year of the purchase and cannot be carried forward to the following year.
Disability and First-Time Home Buyer’s Tax Credit
There is an exception to the first-time home buyer requirement for those purchasing a home for the benefit of a disabled person, such as a relative or close acquaintance. In this case, the ‘’first property’’ condition does not apply, as the property is being purchased for someone else.
However, the residence must be accessible and adapted to the needs of the disabled individual. Additionally, the home must become the disabled person's principal residence within one year of the purchase.
The Quebec provincial tax credit
The Quebec First-Time Home Buyers' Tax Credit follows the same eligibility criteria as the federal tax credit. It is also calculated similarly, by multiplying the credit amount ($10,000) by the lower Quebec tax rate for the year (14%), resulting in a maximum tax saving of $1,400.
Quebec residents can receive a total maximum tax relief of $2,652.50 by combining both tax credits ($1,252.50 from the federal credit and $1,400 from the provincial credit).
To claim the provincial First-Time Home Buyers' Tax Credit, complete form TP-752.HA "Homebuyers' Tax Credit" by the filing date of your income tax return.
Summary table of First-Time Home Buyer’s Tax Credits
| Federal | Provincial | |
| Maximal credit amount | $10,000 | $10,000 |
| Tax rate | 15% | 14% |
| Tax relief amount | $1,500 | $1,400 |
| Tax relief amount for Quebec residents | $1,252.50 | $1,400 |
Are you a first-time buyer looking to buy a house?
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