Buying a home in Canada remains one of the biggest financial decisions in a person’s life. To ease the burden, the federal government offers a powerful incentive: the First-Time Home Buyers’ Tax Credit (HBTC). Updated for May 2025, this credit allows eligible Canadians to claim up to $10,000 on their taxes, reducing what they owe by up to $1,500.
If you’re looking to buy your first home this year, here’s everything you need to know about claiming this benefit.
What Is the $10,000 Home Buyers Tax Credit?
The HBTC is a non-refundable tax credit for Canadians purchasing their first home. Introduced in 2009 and enhanced in 2022, the credit now allows qualifying buyers to claim $10,000, which translates into a $1,500 tax savings based on the standard 15% federal tax rate.
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Credit Amount: $10,000
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Tax Savings: Up to $1,500
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Program Type: Non-refundable tax credit
It can significantly reduce your tax bill in the year of purchase—but only if you meet certain eligibility conditions.
Who Qualifies for the HBTC in 2025?
To claim the HBTC in May 2025, you must meet the following:
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Be a first-time home buyer: You must not have owned a home you lived in during the current or past 4 years.
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Purchase a qualifying home in Canada: Condos, townhouses, detached homes, mobile homes, and apartments qualify.
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Live in the home: You must occupy the home within a year of purchase.
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Disability provision: Even if not a first-time buyer, you may still qualify if you’re buying a home for yourself or a dependent with a disability and meet the DTC (Disability Tax Credit) criteria.
What Kind of Homes Qualify?
Most types of residential properties qualify as long as they’re located in Canada and are meant to be your primary residence. These include:
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Detached and semi-detached homes
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Mobile homes and modular houses
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Townhouses
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Condominium units
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Apartments in duplexes, triplexes, or fourplexes
How to Claim the HBTC in 2025
Claiming this credit is a simple process:
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Enter $10,000 on Line 31270 of your T1 General Income Tax Return.
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You and your spouse or partner can split the amount, but the total claimed must not exceed $10,000.
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Ensure your documentation proves eligibility (e.g., purchase agreement and proof of residence).
Additional Home Buying Support Programs
The HBTC is just one part of Canada’s toolkit to support new homeowners. You may also qualify for:
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Home Buyers’ Plan (HBP): Withdraw up to $35,000 tax-free from your RRSP for a down payment (repay over 15 years).
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First Home Savings Account (FHSA): Contribute up to $8,000/year (maximum $40,000 lifetime) with tax-free withdrawals.
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GST/HST New Housing Rebate: Recover some of the sales tax paid on newly constructed or substantially renovated homes.
Example Scenario
Let’s say you purchase your first home in April 2025. When you file your taxes in early 2026, you can:
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Claim $10,000 on line 31270.
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Reduce your federal tax bill by $1,500.
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Combine it with FHSA savings and HBP withdrawals to further ease financial strain.
Key Considerations and Tips
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File your taxes on time to avoid missing out on the credit.
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If your tax owed is less than $1,500, the unused credit won’t be refunded (non-refundable).
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If you purchased the home with a partner, coordinate to ensure the claim is accurate.
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Check for provincial incentives—some provinces like Ontario and BC offer additional rebates.
FAQs
Can both spouses claim $10,000 each under HBTC?
No. The maximum claim per household is $10,000. You can split it between partners, but the combined total cannot exceed that limit.
Can I get a refund if my taxes are less than $1,500?
No. The HBTC is non-refundable. It can reduce your tax payable to zero but won’t generate a refund beyond that.
What if I’ve owned a home before?
You won’t qualify unless you haven’t lived in a home you owned during the past 4 years. Exceptions apply if you’re buying for a disabled dependent.
How do I apply for FHSA or HBP?
You can apply for FHSA through your bank or investment provider. HBP is managed through your RRSP provider and must be indicated during withdrawal.
Is the $10,000 credit available every year?
Yes, but only claimable in the year you purchase your first home.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.