Qualifying for the first-time homebuyers tax credit

If your clients bought a home in 2012, they may be able to save on their taxes through the first-time homebuyers’ tax credit, says CRA.

Read: Pay your taxes using mobile devices

Important facts

• If you are a first-time home buyer, a person with a disability buying a home, or an individual buying a home on behalf of a related person with a disability, you may be able to claim a non-refundable tax credit of up to $750 when you buy a qualifying home.
• To qualify for the homebuyer’s tax amount, your client or his spouse or common-law partner must have purchased a qualifying home; and he did not live in another home owned by him or his spouse or common-law partner that year or in any of the four preceding years.
• Persons with disabilities may also qualify for this credit even if they already owned a home. If they’re eligible for the disability amount or they purchased a home for the benefit of a related person who is eligible for the disability amount, they may be able to claim the credit.

Read: Party’s over for tax-advantaged investing

Your client may also be eligible for the homebuyer’s plan, which allows him to withdraw funds from his RRSPs to buy or build a qualifying home. He may withdraw up to $25,000 in a calendar year, and have up to 15 years to repay his withdrawals.

Also read:

15 tax credits for Canadians

8 ways clients can manage finances

How CRA finds unreported income

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.