It is in your best interest to understand all of the costs involved when buying a home as well as any assistance that might be available such as tax credits or rebates. Many people get confused between a New Housing Tax Rebate Toronto, Ontario residence can claim and the First-Time Home Buyers’ Tax credit. Here is a comparison.
New Housing Tax Rebate
The New Housing Tax Rebate Toronto, Ontario residence can claim applies to the purchase of a newly built home and is not restricted to first time home buyers. Many people believe that in order to qualify for a new housing tax rebate you must purchase a newly constructed home. Although this is true, there are other circumstances under which you can claim your new housing tax rebate. Here is a breakdown of all of the eligible home purchases that fall under this category:
* A brand new built home purchased from a builder
* A home that has undergone substantial renovations which might then classify it as a new home
* A newly built mobile home (manufactured)
* A newly built modular home
* You make substantial renovations or rebuilding of your current home including major changes such as an addition
* Rebuilds following a fire
Newly built homes charge HST. As the purchaser of a newly built home you can claim up to 36 percent of the federal portion of the HST you have paid out on your newly built home. The rebate is capped at $6300 or basically homes below $350,000. You can also than claim up to 75 percent of the provincial portion for up to $24,000.
First-Time Home Buyers’ Tax Credit
The First-Time Home Buyers’ Tax Credit is strictly available to those purchasing their first home. The home can be new or a resale. The credit is designed to offset the cost of buying a home which can prove expensive and discourage people from taking the step of owning versus renting a home. The $5,000 non-refundable HBTC amount can provide up to $750 reimbursed on federal taxes. All parties involved in the purchase must be first time buyers. In other words if a spouse has owned a home in the past and their name is on the mortgage you will not be eligible for the credit.
As you can see the New Housing Tax Rebate and the First-time Home Buyers’ Tax Credit are very different. The good news is that if you are lucky you could be eligible for both.