Purchasing a home is a significant financial investment, and the Canadian government offers various programs to ease the financial burden. One such program is the First-Time Home Buyers’ Tax Credit (HBTC), designed to help eligible buyers save on taxes in the year they purchase their home. This tax credit can be a valuable tool to make homeownership more affordable, reducing the amount of tax owed on your return.
If you are a first-time homebuyer or buying a home for a relative with a disability, you may qualify for up to $10,000 in tax credits, which translates into a $1,500 tax reduction. In this article, we will explore How Do You Qualify for First Time Homebuyer Tax Credit, the eligibility criteria, benefits, property qualifications, and steps to claim the HBTC. We will also discuss what to do if you forgot to claim this tax credit on your return.

To qualify for the First-Time Home Buyers’ Tax Credit, you must meet the following conditions:
You do not have to be a first-time homebuyer if you or a related person with a disability meet the following criteria:
In both cases, the home must be occupied as a principal residence within one year of purchase.
Eligible first-time homebuyers in Canada can claim up to $10,000 on their tax return through the Home Buyers’ Tax Credit (HBTC). Since this credit applies at a 15% tax rate, it results in a one-time tax reduction of $1,500. However, it is non-refundable, meaning it can only reduce the amount of taxes owed—it will not generate a refund if you have no tax liability.
Yes! If you purchased a home with a spouse or common-law partner, you can share the claim. However, the total combined claim cannot exceed the $10,000 limit. This means that while you and your partner can divide the credit in any way you choose, the maximum tax reduction remains $1,500 between both of you.
Buying a home comes with significant upfront expenses, such as:
The HBTC helps offset these costs, providing financial relief during an expensive transition. By reducing your taxable income, this credit allows you to keep more money in your pocket to invest in your new home.
To be eligible for the Home Buyers’ Tax Credit, the property must:
The following types of homes qualify:
If you’re purchasing a newly built home, you can still claim the HBTC—as long as you move in within one year of the closing date. This ensures that the credit is used for homes intended for immediate occupancy rather than investment or rental purposes.
Beyond the HBTC, the Canadian government offers several programs to assist first-time buyers in making homeownership more affordable.
The FHSA is a tax-free savings account designed exclusively for purchasing a home.
The HBP allows you to withdraw up to $35,000 from your Registered Retirement Savings Plan (RRSP) to purchase or build your first home.
These programs can be combined with the HBTC for even greater savings on your home purchase.
Beyond tax credits and savings accounts, choosing the right mortgage strategy can help reduce long-term costs.
By taking advantage of tax credits, savings programs, and strategic mortgage planning, first-time homebuyers can significantly lower the costs of homeownership and build equity faster.
Claiming the HBTC is simple. Follow these steps when filing your tax return:
For more details, visit the Canada Revenue Agency (CRA) website.

If you forgot to claim the First-Time Home Buyers’ Tax Credit when filing your taxes, you can still make corrections. Here’s how:
It’s always best to consult a tax professional to ensure you receive the full benefits you are entitled to.
The First-Time Home Buyers’ Tax Credit (HBTC) is an excellent opportunity for new homeowners and individuals purchasing homes for persons with disabilities to save on taxes. By reducing the tax burden in the year of purchase, this credit can make homeownership more affordable.
Additionally, government programs like the FHSA and HBP can provide further financial support, allowing first-time buyers to make informed decisions about their real estate investments.
If you’re considering buying a home in Mississauga, let Mississauga Homes and our Top Real Estate Agent Mississauga team guide you through the process. Contact us today to explore your homeownership options and take advantage of all available benefits!
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Joe Battaglia brings over 25 years of real estate expertise in Mississauga and the Greater Toronto Area. As leader of the Battaglia Team at RE/MAX Realty Specialists, Joe is dedicated to helping families find their perfect home.