When buying home in Ontario there are several different financial matters you have to keep in mind. The cost of the move itself, home related expenses, closing costs, and tax implications are just some of the many different financial impacts buying a home has. Despite the work involved owning a home is both financially and personally rewarding. Home ownership also carries tax benefits as well. The Home Buyers Tax Credit is one such way that owning a home can save you money. What follows is a brief overview of what the Home Buyers Tax Credit is, how you qualify for it, and what to expect from it.
What Is The Home Buyers Tax Credit?
The Home Buyers Tax Credit was introduced in Canada's Economic Action Plan in 2009 and can be claimed going forward. The idea behind the law is that buying a home is very expensive and includes several fees such as legal costs, closing costs, land transfer taxes, home inspections, and other related expenses. By giving citizens such as yourself a tax credit you can use the money saved to cover these and other expenses. No matter what you use it for the Home Buyers Tax Credit is intended to make home ownership more financially feasible.
How Do You Qualify For It?
To qualify for the credit you must meet the following criteria:
- You have to be in the province of Ontario as is the home you are buying and you must be planning on residing there within one year of your purchase.
- You cannot have owned a home within the first four years.
- The home itself can be existing or newly constructed and can be a home, condo, apartment, semi attached, a mobile home, a share in a co-op where you claim ownership, or a townhouse.
- You will also have documents available showing you have purchased a home when requesting the credit and filing your taxes; you don’t have to send these in with your tax forms they just have to be accessible if need arises or proof is requested.
What Do You Receive From The Home Buyers Tax Credit?
The credit itself is based on a mathematical formula. The formula is $5,000 multiplied times the lowest tax rate for the year of your filing. For example in 2015 this is 15 percent. That equals to a tax credit of $750 you can take when you file your taxes for the year. Note that if you have a spouse, common law partner, or claim joint ownership of a home you can either have one party claim the full credit or split it between both parties however, note that when split the total credit claimed cannot be greater than $750.
As you can see the Home Buyers Tax Credit is a very useful credit to make use of if you're looking to purchase a home. It saves you money by awarding you credit for purchasing a home, which is of great benefit not only to yourself but also for the stability of your local community. The requirements are not overly complex and rather common sense and are actions you would be performing during a routine home purchase. If buying a home be sure to make use of this credit. For more information on the home buyers tax credit, and to find your next home, contact us at Mary Roy and Team.