Proposed in Federal Budget 2009
Action to Stimulate Housing Construction
The Government is providing $7.8 billion to build quality housing, stimulate
construction, encourage home ownership and enhance energy efficiency. Measures
include a Home Renovation Tax Credit providing up to $1,350 in tax relief to an
estimated 4.6 million Canadian families, up to $750 in tax relief for first-time home
buyers, funding for energy retrofits, investments for social housing to support lowincome
Canadians, seniors, persons with disabilities and Aboriginal Canadians, and
low-cost loans to municipalities.
Budget 2009 proposes to introduce a new non-refundable tax credit based on an
amount of $5,000 for first-time home buyers who acquire a qualifying home after
January 27, 2009 (i.e. the closing is after that date). The credit for a taxation year will
be calculated by reference to the lowest personal income tax rate for the year and is
claimable for the taxation year in which the home is acquired.
An individual will be considered a first-time home buyer if neither the individual nor
the individual's spouse or common-law partner owned and lived in another home in
the calendar year of the home purchase or in any of the four preceding calendar
years. A qualifying home is one that is currently eligible for the Home Buyers' Plan
that the individual or individual's spouse or common-law partner intends to occupy as
the principal place of residence not later than one year after its acquisition.
Budget 2009 also proposes that the credit be available for certain acquisitions of a
home by or for the benefit of an individual who is eligible for the disability tax credit
(DTC). In particular, the credit will be available in respect of a home acquired after
January 27, 2009 (i.e. the closing is after that date) by an individual who is eligible for
the DTC, or by an individual for the benefit of a related individual who is DTC-eligible,
if the home is acquired to enable the DTC-eligible individual to live in a more
accessible dwelling or in an environment better suited to the personal needs and
care of that person.
For the purpose of this credit, a "DTC-eligible" individual is an individual in respect of
whom an amount is deductible under the DTC for the taxation year in which the
agreement to acquire the home is entered into, or would be deductible if costs for an
attendant or care in a nursing home were not claimed for Medical Expense Tax
Credit purposes by or on behalf of that person. Where the home is acquired by or for
the benefit of a DTC-eligible individual, the home must be intended to be the
principal place of residence of that individual no later than one year after its
acquisition.
The credit may be claimed by the individual who acquires the home or by that
individual's spouse or common-law partner. For the purpose of this credit, a home is
considered to be acquired by an individual only if the individual's interest in the home
is registered in accordance with the applicable land registration system.
Any unused portion of an individual's First-Time Home Buyers' Tax Credit may be
claimed by the individual's spouse or common-law partner. Where more than one
individual is entitled to the First-Time Home Buyers' Tax Credit (for example, where
two individuals jointly buy a home), the total amount of the credits claimable for the
year by those individuals shall not exceed the maximum amount of the credit that
would be claimable for the year by any one of those individuals.
For more information, visit http://www.budget.gc.ca/2009/plan/bptoc-eng.asp