I have a new client who bought a house in 2020. The previous accountant didn’t claim the Home Buyers Amount (“HBA”) on the 2020 T1, presumably because the client had sufficient other tax credits to bring his tax down to zero.
I have looked at the ITA (118.05) and can’t see where it says the house has to be purchased in the year you claim the HBA. According to the ITA, it appears that the house just has to be acquired after January 27, 2009. I’m looking at claiming the HBA on the 2021 T1.
You can claim up to $5,000 for the purchase of a qualifying home in the year if both of the following apply:
you (or your spouse or common-law partner) acquired a qualifying home
you did not live in another home owned by you (or your spouse or common-law partner) in the year of acquisition or in any of the four preceding years (first-time home buyer)
Yes, I know those basic rules. I just wasn’t sure if there was a requirement to claim it in the year the house was purchased. Some of CRA’s web information says “in the year”, but the Income Tax Act doesn’t appear to require that.
Proposed Amendment
s. 2 of April 7, 2022
Federal Budget
Subsection 118.05(3) is replaced by the following:
(3) First-time home buyers’ tax credit — In computing the tax payable under this Part by an individual for a taxation year in which a qualifying home in respect of the individual is acquired, there may be deducted the amount determined by multiplying $10,000 by the appropriate percentage for the taxation year.
Application: Applicable to the 2022 and subsequent taxation years.
a taxation year in which a qualifying home in respect of the individual is acquired, my interpretation of this line is in a tax year where the “qualifying home” is acquired".
So, I am actually thinking that the HBTC can only be claimed in the same tax year that the home is purchased.
I think all responses here are saying no - you can claim the credit only in the year the house was purchased (i.e. “acquired” = “purchased”, and “for the taxation year” means it does not apply to any OTHER taxation year than the one you are currently filing). It makes sense that you would get such a benefit only in that year - this credit was created was because it is so hard for a first-time home buyer to come up with a down-payment. The down-payment must be made BEFORE you take possession of the house - not a year later.