First-Time Home Buyers' Tax Credit (HBTC)

For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., closing after this date).

The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.

An individual will qualify for the HBTC if:

• they acquire a qualifying home; and
• neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.

If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first time home buyer. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person. As well, you or the related person with a disability must intend to occupy the home as a principal place of residence no later than one year after buying it.

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

The individual's interest in the home must be registered in accordance with the applicable land registration system.

Beginning with the 2009 personal income tax return, a new line will be incorporated to allow you to claim the credit.

For more information visit www.cra-arc.gc.ca

Canada's Economic Action Plan offers Home Renovation Tax Credit

Renovating can be a great way to add value to your home. It can make your house a more comfortable environment for you and your family, and even reduce your energy bills. And now, with the introduction of the new Home Renovation Tax Credit (HRTC), this might be the best time to begin the renovations you’ve been planning.

As part of Canada’s Economic Action Plan, the Home Renovation Tax Credit will provide a one-year, temporary 15% income tax credit on eligible home renovation expenditures for work performed, or goods acquired between January 27, 2009 and February 1, 2010. The credit may be claimed on eligible expenses exceeding $1,000, but no more than $10,000, for a total credit of up to $1,350.

Eligible renovation expenditures include: renovating your kitchen, bathroom or basement; installing new carpet or hardwood floors; building an addition, deck, fence or retaining wall; installing a new furnace, central air conditioner or water heater; painting the interior or exterior of your house; resurfacing a driveway and laying new sod. Renovations which are not eligible for the credit include: purchase of furniture, appliances and tools, carpet cleaning, and maintenance contracts.

If you’re planning a larger renovation, CMHC-insured loans can help you access your home’s equity at lower interest rates than those offered for unsecured loans. Be sure to ask your mortgage professional for more information on CMHC-insured loans.

GTA REALTORS® Report August Mid-Month Resale Market Figures

In the first two weeks of August, Greater Toronto REALTORS® reported 3,832 sales – up 27 per cent compared to the first two weeks of August 2008. The average price for these transactions was up three per cent year-over-year to $383,796.

"The results for the first half of August indicate that many households in the GTA
remain confident in their ability to purchase and pay for a home over the long
term," said TREB President Tom Lebour.

Year-to-date sales, at 54,303 are up slightly compared to 54,138 in 2008. Average price, at $385,603 is down by less than one half of one per cent.

"Strong resale housing demand will contribute to broader economic recovery as each transaction results in substantial spin-off benefits to other sectors of the economy," explained Jason Mercer, TREB's Senior Manager of Market Analysis.

GTA REALTORS® report resale record in July

In July 2009, Greater Toronto REALTORS® reported a record 9,967 sales, up 28 per cent from July 2008. The average price for July transactions was $395,414 – up by six per cent
compared to the same month last year. “Households confident in their positioning within the current economic environment have taken advantage of housing affordability in the GTA,”
said TREB President Tom Lebour. “The real estate sector has been one of the sectors making a positive contribution to economic growth in the GTA, not to mention Ontario and Canada more
broadly.”

Year-to-date sales, at 50,632 are down 1.2 per cent compared to the first seven months of 2008. Average price, at $385,808 is down by less than one-half of one per cent.
“The steep drop-off in sales experienced at the beginning of the year has all but dissipated,” explained Jason Mercer, TREB’s Senior Manager of Market Analysis. “With five months left to go in the year, it is probable that total existing home sales in 2009 will be at or above last year’s level.”