Buying your first home is a major milestone, but it can also come with significant financial challenges. To support new buyers, the Canadian government offers the First-Time Home Buyers’ Tax Credit, a valuable tax benefit designed to ease the financial burden. If you’re planning to enter the housing market in 2025, understanding this credit and how it works can help you save money and make smarter decisions.

What Is the First-Time Home Buyers’ Tax Credit?

The First-Time Home Buyers’ Tax Credit (HBTC) is a non-refundable tax credit that reduces the income taxes payable by first-time homebuyers. The credit is based on a fixed amount of $10,000 applied against Canada’s lowest personal income tax rate of 15%, which can translate into a tax reduction of up to $1,500. This credit is a one-time benefit that you can claim in the tax year you purchase a qualifying home. It’s designed to help offset some of the upfront costs involved in buying your first property, which is particularly important given the rising costs seen in many Canadian real estate markets.

Eligibility Criteria for the HBTC

To qualify for the HBTC, you need to meet specific conditions:

• You (or your spouse or common-law partner) must have purchased a qualifying home in 2024 or later.

• Neither you nor your partner has owned a home in the past four years.

• The home must be your principal residence by January 1 of the year following the purchase.

• In some cases, the credit extends to persons eligible for the Disability Tax Credit or those purchasing a home for such an individual.

If you are browsing homes for sale in Edmonton or considering investment opportunities in Edmonton, knowing these criteria can help you plan your purchase timeline and maximize your tax benefits.

What Qualifies as a Home?

The HBTC applies to a wide range of property types as long as they are located in Canada and meet legal registration requirements. Qualifying homes include:

• Detached, semi-detached, townhouses, or mobile homes.

• Condominium units or apartments within multi-unit buildings.

• Shares in housing cooperatives that grant ownership of the underlying property.

This means that whether you’re searching for affordable residential investment options linked to commercial real estate Edmonton, the HBTC can potentially apply, provided the house will be your principal residence.

How to Claim the First-Time Home Buyers’ Tax Credit

Claiming the HBTC is a straightforward process:

• When you file your Canadian income tax return for the year you purchased your home, enter the Home Buyers’ Amount 

• Be sure to keep documentation such as your purchase agreement or deed to verify the date and details of your home purchase.

• Since the credit is non-refundable, it reduces your taxes payable but does not create a refund if your taxes owed are less than the credit.

If you’re investing in real estate in Edmonton, whether for personal use or business purposes like commercial real estate Edmonton, consulting a tax professional or a mortgage advisor is advisable. They can help you correctly claim your credit and explore other financial benefits linked to property ownership.

Recent Updates and Additional Benefits for First-Time Buyers 

The HBTC amount was doubled in 2022 from $5,000 to $10,000, significantly increasing the potential tax relief for buyers. Beyond the HBTC, new government initiatives introduced in 2025 also assist first-time buyers:

• A new GST rebate offers up to a 5% rebate on eligible new homes priced up to $1 million, gradually phasing out for homes priced up to $1.5 million.

• Enhanced withdrawal limits for the Home Buyers’ Plan (HBP) now allow buyers to withdraw up to $60,000 tax-free from their RRSPs to put towards purchasing a home.

These programs can save first-time buyers thousands of dollars and make homeownership more attainable, whether you’re considering mixed-use properties involving commercial real estate Edmonton.

Why the First-Time Home Buyers’ Tax Credit Matters

• It provides direct tax relief, reducing the federal income tax you owe.

• Helps ease the financial pressure of initial homeownership costs.

• Complements other government incentives to balance out rising home prices and interest rates.

If you’re considering a real estate purchase in Edmonton or nearby areas, understanding and utilizing the HBTC can make a meaningful difference in your budget and long-term financial planning.

Final Thoughts

The First-Time Home Buyers’ Tax Credit remains an essential benefit for Canadian buyers entering the housing market. By reducing your tax bill by up to $1,500, it offers real financial support during a costly transition to homeownership. Whether you are browsing homes for sale in Edmonton or exploring investment opportunities in commercial real estate Edmonton, knowing about the HBTC and related programs can help you make informed decisions and maximize savings. For personalized advice tailored to your situation, consider consulting a local mortgage or tax professional who understands the Edmonton market and can guide you through the nuances of these benefits.