First-Time Homebuyers Tax Credit: What It Is, Who’s Eligible

Nobody likes paying taxes – especially when you’re closing on your first home. It feels like yet another payment you have to make to finalize the deal; while discouraging, it’s an essential part of the process. Even so, first-time homebuyers may be eligible for a first-time homebuyers tax credit. If eligible, first-time homebuyers must either apply for a refund within 18 months of registering the conveyance deed or the date of the unregistered disposition (whichever the case may be).

Who’s eligible?

You must never have owned a home or even an interest in a home (e.g. if you owned a home with another person, but were unmarried) anywhere in the world. The good news is that if your spouse owned a home/interest in a home before you two were married, that doesn’t disqualify you from obtaining the tax credit (though it could decrease your refund). You must be at least 18 years old, living at the property within nine months of the land transfer, and a Canadian citizen.

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What if I’m not a citizen?

While this may not apply to most Ontarians, it’s still worth mentioning that non-Canadian citizens who are first-time homebuyers may still obtain a tax credit. As long as you would otherwise qualify for the tax credit, you have approximately 18 months after registering to obtain the tax credit. These same rules apply for your spouse. If for some either you or your spouse cannot become a Canadian citizen within the timeframe, the qualifying party can only claim their part of the refund (50%); of course, the claims cannot exceed beyond $4,000.

How much could eligible homeowners receive?

If conveyance/disposition occurred before January 1, 2017 first-time homebuyers can only receive a maximum of $2,000; not chump change by any means. If conveyance/disposition occurred after New Year’s Day 2017, first-time homebuyers will fare better as the maximum they can receive doubles to $4,000. Slightly off-topic but worth noting is that beginning January 1, 2017 first-time homebuyers that qualify will not have to pay land transfer tax on the first $368,000 of the value of the home. Those qualifying that purchase a home greater than $368,000 will still receive a maximum refund of $4,000.

How to apply

The Ontario Ministry of Finance details exactly how one must apply – go there and follow the instructions. One thing to note is there are different procedures if you registered electronically or by paper. For those that are unable to claim their refund at the time of registration, you’re not out of luck! Simply make a refund claim to the Ministry of Finance when it’s time to pay the land transfer tax. After you have applied, you can receive the credit directly into your checking account by filling out this direct deposit request.

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If you have any further questions, feel free to reach out to the Ministry of Finance (it’s easy to remember – 1-866-ONT-TAXS) to clear up any confusion you may have. We’re here to answer questions as well! If you are anxious to buy your first home and want to know if you would theoretically be eligible for a land transfer tax credit, contact us today and learn everything you need to know about the tax credit that’s helping so many first-time homebuyers settle into their new home just a little bit easier!

By |2018-11-20T09:52:25+00:00November 13th, 2018|Mortgage Information|0 Comments

About the Author:

Diane Bertolin
Diane along with her team have over 120 years of real estate experience between them all from mortgage lending, to land development, construction, and real estate sales. Diane’s knowledge of economics, her fervent enthusiasm to read everything and her overall desire to help people to become financially independent lead her to this point of building her newest business. She joined the Unimor Capital Corporation team in September of 2016. Diane takes pleasure in helping people get the funds they need to get their dream property, but she also tells you when you cannot afford something. Diane strives to get you, your best mortgage or real estate investment.

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