First time home buyers credit | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
First time home buyers credit
December 1, 2017
11:54 am
shadysbrownies
Member
Members
Forum Posts: 7
Member Since:
December 1, 2017
sp_UserOfflineSmall Offline

I purchased a house in 2014 and received the first time home buyers credit on my 2014 taxes. I should note I am in Alberta. My fiancé and I will likely be buying another house that will become our primary residence this new year and the 2014 house will be rented out. She doesn't live with me in the 2014 house right now. When we purchase together in 2018 can we still get the full first time home buyer credit since she has never bought a house before? Or only part of it because I have already bought a house? Or none? Would it matter if we bought the house before or after getting married in July? Just trying to best understand and maximize the credit if possible.

December 1, 2017
2:49 pm
Bill
Member
Members
Forum Posts: 3890
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

canada.ca site says:

You can claim $5,000 for the purchase of a qualifying home in 2016 if both of the following apply:
•you or your spouse or common-law partner acquired a qualifying home; and
•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).

Appears your fiancé would qualify, assuming new house will be owned by you and/or fiancé, and she can get it before marriage if you're living in it common-law beforehand.

December 2, 2017
11:37 pm
Loonie
Member
Members
Forum Posts: 9214
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

I interpret it that the fiancee will qualify if she buys the house in her own name only and does not live in your house at any time prior to that. Afterwards, it could be changed to joint ownership; you need to check if there is a minimum time that she must own it on her own. The key phrase is "you did not live in another home owned by... your (in this case her) spouse or common-law partner (i.e. you)".
Rental, house-sitting and living with friends or family are not mentioned however. If need be, you could sell your house, live together somewhere else, then she buys, and then you move in.
You may want to leave a breadcrumb trail documenting where each of you were living through this period, with witnesses, just in case you need to prove it. Make sure drivers' licenses tell the correct story as to residence.

If still unsure, speak to a lawyer. You will be dealing with a lawyer anyway when you sell your house.

December 3, 2017
6:47 am
Bill
Member
Members
Forum Posts: 3890
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Let's assume that even though couples usually buy homes jointly in both names in this case shadysbrownies buys the house in his name only. Fiancé applies for credit.

Fiance meets first condition, i.e. spouse acquired qualifying home.
Fiance meets second condition, i.e. she didn't previously live with spouse in a home owned by either one (that is KEY, not to have previously lived together in a home owned by either one).

This is just a basic tax rebate for people who are buying their first home with or without a spouse, fiancé qualifies, and no need to change ownership later, etc - but that's just my reading. Phoning CRA or whoever administers the rebate (ask for someone whose expertise includes this rebate) might provide another level of comfort.

December 3, 2017
5:35 pm
shadysbrownies
Member
Members
Forum Posts: 7
Member Since:
December 1, 2017
sp_UserOfflineSmall Offline

Thanks everyone. Yes it is probably a good idea to speak with someone at cra maybe. Hopefully it does not involve putting the house in my fiancés name only and then changing it to both of us later. I don't think it should matter if the house is purchased before or after we are married. She won't have lived in the house owned by me prior to living in the one we will be buying and we won't be living common law prior to moving into the new house. what I need to find out is if the credit can be split between us if it makes sense to do so. Ie: sharing with me if I have more income and taxes. Or if it cannot be shared with me due to me owning a house already

December 3, 2017
5:58 pm
Loonie
Member
Members
Forum Posts: 9214
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

I agree that fiancee qualifies, as Bill has said. But that's it.
Shadysbrownies will not qualify for anything and will not be able to apply this to his tax return, nor should he as he already got his rebate.
You need to read the conditions twice, using the perspective of each person as "you", then I think it becomes clear.
I still think she will have to buy the house on her own because it says "you OR your spouse" in the first condition. This implies a single purchaser. There is no provision for you AND your spouse etc.

I wouldn't bother calling CRA. I believe it was the auditor-general who recently disclosed that one-third of answers from CRA are incorrect. If you want advice, speak to a lawyer who can, if necessary, look up the case law.

December 3, 2017
7:04 pm
Bill
Member
Members
Forum Posts: 3890
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

shadysbrownies, as I indicated you'll be fine, fiancé qualifies for the entire amount, you don't get any as you've had your one shot, she'll get it if it unfolds as you indicate, no need to worry about whose name it's in, can purchase before or after legal marriage, no need to pay for legal advice. Here are some excepts from the General Guide:

"A qualifying home must be registered in your and/or your spouse’s or common-law partner’s name in accordance with the applicable land registration system and it must be located in Canada."

"You and your spouse or common-law partner can split the claim, but the combined total cannot exceed $5,000. When more than one person is entitled to the amount (for example, when two people jointly buy a home), the total of all amounts claimed cannot exceed $5,000." (This will not apply to you, as your fiancé will not split the claim - it's an option but it's not here because you have had your credit so are not entitled to anything here.)

Fyi, I'm somewhat familiar with a similar provision regarding HST rebates on new homes and although the legislation refers exclusively to "an individual" CRA administers this to also mean a married couple - obviously the legislators are not going to punish couples who buy houses jointly vs individuals or couples where the house is in one name. As well, joint ownership (vs as tenants in common) is how couples usually purchase their home, and the basis of joint is that each has a whole, undivided interest in the real property, i.e. when one dies nothing need be done as the survivor is considered to continue owning the entire property.

December 31, 2017
1:40 pm
shadysbrownies
Member
Members
Forum Posts: 7
Member Since:
December 1, 2017
sp_UserOfflineSmall Offline

Hey Bill, as this relates to my original post, I wanted to get your opinion on this as well. Regarding the Home Buyers' Plan (https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html#RRSP-withdrawalconditions), if I add my fiance to my RRSP, could we then take advantage of the HBP even though I am not a first time home buyer? Based on what I've read and your above comments, I would think so because she has never lived with me and she has never bought a house. Not sure if it would matter if I made my RRSP joint with her before or after we got married though. Thanks for your comments and to anyone else that wants to add their thoughts!

December 31, 2017
2:09 pm
Norman1
Member
Members
Forum Posts: 6679
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

I don't think an RRSP can have more than one owner/annuitant.

Spousal RRSP's have more than one contributor. But, there's still only one annuitant.

December 31, 2017
5:04 pm
Loonie
Member
Members
Forum Posts: 9214
Member Since:
October 21, 2013
sp_UserOnlineSmall Online

An RSP always belongs to only one person at a time. They can be acquired by spouse on your death.
You can contribute new money to your spouse's RSP, but you probably don't want to do that right now. There are specific conditions under which you can access that money again, and I don't think you would qualify.

January 1, 2018
3:24 pm
Bill
Member
Members
Forum Posts: 3890
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

shadysbrownies, you've got your answers from Norman1 and Loonie, nothing for me to add.

Please write your comments in the forum.