First Time Homebuyer Bonus Clarified

There has been sone confusion regarding the recent announcement from the Provincial Government about the First Time Home Buyer’s Tax Credit. There are 2 programs in effect. Here is a summary clarifying both programs:

New Home Buyer’s Bonus:

– Only applies in British Columbia

-5% of the purchase price to a maximum of $10,000 bonus payable

-Applies only to purchase of new construction or substantially renovated property

All buyers must be first time home owners, anywhere, ever

Separate form to complete and apply

-Funds are sent directly to buyer upon approval

-FMI: http://www.sbr.gov.bc.ca/individuals/Income

First Time Home Buyer’s Tax Credit:

-Canada wide

-Non-refundable tax credit applied against taxable income using the lowest marginal tax rate ($750 maximum tax refund)

-Apply using line 369 of Schedule 1 on the Federal tax form

-Only reduces taxes payable by that amount, not a bonus or grant

-Applies to purchase of new and existing homes

-Applicant or spouse (or common law) must be first time home buyers, ie not have lived in a home owned by self or spouse in any of the 4 preceding years.

-Apply when filing income taxes in the year of purchase

FMI: http://www.cra-arc.gc.ca

As always, we are here to help.