Risk & Business Magazine Cain Insurance Spring 2016 | Page 30

Tax Credits

Advantages When Purchasing A Home
BY: DAVE ARMSTRONG, PARTNER, EPR DAYE KELLY & ASSOCIATES

B

uying a home is a significant financial
decision for every Canadian and
a stressful time due to the nature of
the transaction, choosing the location,
the type of home, the available budget,
financing decisions, the conveyance
process and then moving. It is important
that anyone who is thinking of buying a
home does not get distracted but takes
advantage of some significant tax benefits
and/or tax credits.

A qualifying home is a housing unit
located in Canada and acquired after
January 27, 2009.

Home Buyers’ Plan

Tax incentives are available if some
conditions are met; generally the
conditions favour the first time home
buyers, and the purchases of lower cost
homes.

Individuals can borrow up to $25,000
from their RRSP to buy or build a
qualifying home. The amounts borrowed
must be repaid into the RRSP over a
period of 15 years. Missed payments will
be added to the income of the individual.
For the RRSP amounts to be eligible
for the withdrawal, the contributions
must be made at least 90 days before the
withdrawal.

First Time Home Buyers’ Tax Credit

The taxpayer must meet the following
conditions:

Up to $750 non-refundable tax credit
is available to individuals that meet the
following criteria:

• Enter into a written agreement to
buy or build a home;

• The individual or the spouse
acquired a qualifying home;

• Intend to occupy the home as a
principal residence within one year
of the purchase;

• The individual or the spouse has
not occupied a principal residence
in the year of acquisition or in any
of the preceding four years.

• Be a first time home buyer, defined
as not having owned a home
that was occupied as a principal
residence in the four calendar years

prior to the withdrawal;
• Not have any outstanding amounts
to be repaid into the RRSP from
previous participation in a Home
Buyer’s Plan;
• Must be a resident of Canada;
• Receive all the withdrawals in the
same year;
• The withdrawals can be made
before the purchase o