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Life update & first-time homebuyer tax questions
April 14, 2024
12:41 pm
Doug
British Columbia, Canada
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Hi everyone:

It occurred to me that I don't believe I've shared a bit of a personal life update, so before I dive into my first-time buyer tax questions, I thought I'd begin with a brief update. First, as many of you know, I used to work for a former Schedule II chartered bank in Canada. A number of years ago, I went back to school by enrolling in the Library & Information Technology diploma program with Langara College, which I completed entirely online / remotely. I graduated in spring 2020, and, since summer 2021, have been working full-time as a library technician with the local regional public college and training institute in my area. I do enjoy it, and, in particular, really enjoy the responsibilities I've taken on with my union (as a shop steward, local health & safety representative, etc.).

As part of this new career, I participate in a multi-employer, jointly trusteed defined benefit pension plan, which includes a potential, though not guaranteed, annual inflation index, from the Municipal Pension Plan of B.C.

As part of that, I have re-evaluated my savings rate, lack of dependents, and needs, as well as my expected working life of at least 25 years remaining (assuming I work to age 65), and determined I had sufficient excess savings to be able to purchase a small studio condominium close to work, which will have the added benefit of commuting time savings every day. With HISA deposit rates as high as they are, this will also reduce the amount of taxable interest income I am paid each year.

I just wanted to double-check my understanding as I prepare to file my 2023 income tax and benefit return. For the first-time homebuyers' tax credit (FBTC or Home Buyers' Amount), though I signed the presale contract for purchase with the developer in November 2022 and paid a 15% deposit at that time, it did not close until March 27, 2024, with possession on March 28, 2024. As a result, I would not claim the Home Buyers' Amount until I file my 2024 income tax and benefit return next year, correct? I did set up a First Home Savings Account with Scotiabank in 2023, and made an initial contribution of $8,000 to the FHSA in 2023 for which I received the contribution receipt, so I would claim that amount. I made a second $8,000 contribution for 2024 in January 2024, then withdrew the funds, together with accrued and paid interest from the FHSA in mid to late February 2024. I would claim the second $8,000 FHSA contribution in 2024, when I claim the Home Buyers' Amount, correct?

As part of funding the purchase, I withdrew $35,000 from my Scotia iTRADE RRSP under the Home Buyers' Plan (HBP) under in late January or early February 2024, so would also report that on my 2024 income tax and benefit return, correct? Likely 2025 would be the first tax year when I'd have to either repay the first amount or declare that amount as taxable income, right?

Finally, while I also claimed the B.C. property transfer tax exemption and GST New Housing Rebate at time of closing, those aren't specific income tax return tax credits to claim. Are there any other income and benefit tax credits I should claim? Moving expenses I would claim next year, if I were eligible, but as I am not moving more than 45 kilometres closer to work, I am not eligible.

Cheers,
Doug

April 14, 2024
6:56 pm
Doug
British Columbia, Canada
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Slight bump to this thread in case anyone hadn't noticed it yet.

Cheers,
Doug

April 20, 2024
7:13 pm
Doug
British Columbia, Canada
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Thread bump.

April 20, 2024
7:39 pm
Briguy
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Congratulations on your new career !
From my understanding of FHSA you have done everything correctly.
You do not own the condo until closing, even if you occupy it earlier or just made deposits earlier.

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