First-Time Home Buyers’ Tax Credit: What Canadian Buyers Need to Know

The First-Time Home Buyers’ Tax Credit, officially called the Home Buyers’ Amount, is a federal, non-refundable tax credit for eligible Canadians who buy a qualifying home.

Buying your first home comes with many upfront costs, including legal fees, home inspections, moving expenses, land transfer tax, and other closing costs. The First-

Time Home Buyers’ Tax Credit, also known as the Home Buyers’ Amount, is a federal tax credit designed to provide eligible Canadians with some financial relief after purchasing a qualifying home.

While it may not cover every cost associated with buying a home, it can be a helpful part of a first-time buyer’s overall financial plan.

What Is the First-Time Home Buyers’ Tax Credit?

The First-Time Home Buyers’ Tax Credit is a federal non-refundable tax credit available to eligible individuals who purchase a qualifying home.

Eligible buyers may claim up to $10,000 on their income tax return. Since the credit is calculated using the lowest federal personal income tax rate, it can provide tax relief of up to $1,500.

The credit is intended to help offset some of the expenses that often come with purchasing a first home.

What Does “Non-Refundable” Mean?

A non-refundable tax credit reduces the income tax you owe. However, it does not create a refund beyond the amount of tax you would otherwise pay.

For example, if you qualify for the full $1,500 credit and owe at least $1,500 in federal income tax, the credit can reduce your tax payable by the full amount. If you owe less tax, the credit can only reduce your tax payable to zero.

The First-Time Home Buyers’ Tax Credit is not a cash payment at closing. It is claimed when you file your income tax return for the year you purchased the home.

Who May Qualify?

To claim the credit, you must generally purchase a qualifying home and meet the first-time homebuyer requirement.

You may be considered a first-time homebuyer if, in the year you purchase the home or in any of the four preceding calendar years, you did not live in another home that you owned or jointly owned.

If you are purchasing with a spouse or common-law partner, their homeownership history may also affect eligibility. It is important to review the rules carefully, especially if one person has owned a home previously.

A qualifying home may include a house, condominium, townhouse, mobile home, or certain other residential properties located in Canada, provided it is registered or expected to be registered in your name or your spouse or common-law partner’s name.

Can the Credit Be Shared?

Yes. If more than one eligible person purchases the same qualifying home, the credit can be split between them.

For example, two eligible spouses purchasing a home together may divide the $10,000 claim between their tax returns. However, the total combined claim cannot exceed $10,000, which means the maximum combined federal tax credit remains $1,500.

If only one spouse or common-law partner qualifies, that person may generally claim the full amount, provided all other requirements are met.

What If You Are Buying a Home for a Person With a Disability?

The credit may also be available to certain individuals purchasing a home for a person with a disability, even if the purchaser is not a first-time homebuyer.

To qualify under this rule, the home must be intended to be more accessible or better suited to the needs and care of the person with a disability. The individual may be eligible for the disability tax credit, or a medical practitioner may need to certify that the home is better suited to their needs.

This can be an important consideration for families purchasing a home to improve accessibility, mobility, safety, or day-to-day living arrangements.

When Do You Claim the Credit?

The credit is claimed on your personal income tax return for the year you purchase the qualifying home.

For example, if you close on your first home in 2026, you would generally claim the credit when filing your 2026 income tax return in 2027.

Keep your purchase agreement, closing documents, and other relevant records in case you need to confirm your eligibility.

How Does This Credit Fit Into Your Home-Buying Plan?

The First-Time Home Buyers’ Tax Credit is only one of several programs that may help eligible buyers.

Depending on your circumstances, you may also wish to explore:

• The First Home Savings Account (FHSA)

• The Home Buyers’ Plan, which may allow eligible buyers to withdraw funds from an RRSP

• Provincial or municipal land transfer tax rebates

• GST/HST rebates for qualifying new or substantially renovated homes

• Gifted down payment options from immediate family members

Using these programs strategically may help you reduce the amount of savings required for your purchase and better prepare for closing costs.

Speak With a Mortgage Professional Before You Buy

The best time to review first-time homebuyer programs is before you begin house hunting. A mortgage professional can help you understand your mortgage qualification, down payment options, closing costs, and the documents lenders may require.

Your accountant or tax professional can help confirm whether you qualify for the First-Time Home Buyers’ Tax Credit and how it should be claimed on your tax return.

Buying your first home is a major milestone. Understanding the incentives available to you can help make the process more affordable, organized, and financially manageable.