Comments on: Buying a home?

Question: Buying a home?

blue_beetle — Mon, 30 Mar 2009 15:28:58 -0800

What is the legal definition of "first-time home-buyer" in Canada?

For the purposes of Government of Canada tax credits, and/or to qualify for various "First-time home-buyer" bank programs, what are the criteria? Must you never have owned a home? Is there a time-limit (eg: not owned a home in the past ten years)? What qualifies (condo/house/apt?) What if you co-signed someone else's mortgage but never lived in or technically owned the home?

By: GuyZero

GuyZero — Mon, 30 Mar 2009 15:36:50 -0800

The Canada Revenue Agency considers the following persons first-time home buyers:

* persons, including former homeowners, who have not owned a home they occupied as a principal place of residence at any time during the four-year period before the date of withdrawal of funds
* disabled persons acquiring a more accessible home
* persons acquiring a more accessible home for a disabled person related to them by blood, marriage, common-law partnership or adoption
* persons providing funds to a disabled person related to them by blood, marriage, common-law partnership or adoption, to build or purchase a more accessible home
* other criteria may apply

From ServiceCanada. This is for the Home Buyer's Plan where you can borrow money from your RRSP, but I'm assuming the CRA definition is consistent for all their programs.

Generally home buyer tax credits only apply to owner-occupied primary residences, e.g. not cottages or a house you rent for income.

If you co-signed a mortgage but didn't live there then you're OK by the first line, assuming you didn't occupy a different home as your primary residence.

By: ethnomethodologist

ethnomethodologist — Mon, 30 Mar 2009 15:41:00 -0800

House or condo makes no difference- why would it?

By: Kololo

Kololo — Mon, 30 Mar 2009 15:41:13 -0800

If you're asking the question with all those options, you probably aren't a first time home buyer.

Generally, i think you're considered a 'first time home buyer' if you aren't cycling the money from the sale of a previous house into your the current purchase. But obviously investors who buy multiple houses without that cycling are not considered first time buyers. So 'owning a house a long time ago' or 'owning a house without living in it' probably don't do anything for you.

That being said, the only tax benefit of buying your first home occurs if you are taking money out of your RRSP to pay for the house (you don't pay taxes on the withdrawal.)

By: ssg

ssg — Mon, 30 Mar 2009 15:42:34 -0800

The criteria for the Home Buyer's Plan (which allows your to withdraw from your RRSP without paying tax) and the Home Buyer's Tax Credit is 4-5 years:

You are not considered a first-time home buyer if you or your spouse or common-law partner owned a home that you occupied as your principal place of residence during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.

So, no co-signing a mortgage won't disqualify you. I'm sure that a condo would also count as a home.

I'd imagine the CRA would use the same definition for all credit, but double checking anything else you intend to apply for would be wise. Give your bank a call about their policy.