First-time home buyer? Consider the following tax incentive

In its 2009 budget the federal government introduced a new, non-refundable First-Time Home Buyers’ Tax Credit (HBCT). The HBCT benefits first-time home buyers with a credit of up to $5,000 for qualifying homes that are acquired and have a closing date after January 27, 2009. For the 2009 tax year this can result in a maximum tax savings of $750.

To qualify as a first-time home buyer, an individual or his/her spouse or common-law partner must not have owned and lived in another home in the same calendar year in which the new home was purchased or in any of the four preceding calendar years.

The new home that is acquired must be the one that the individual or his/her spouse or common-law partner intends to occupy as the principal place of residence no later than one year after the acquisition. The credit can be claimed by either spouse or common-law partner and any unused portion of the individual’s credit may be claimed by his/her spouse or common-law partner.