Buying your first home in Canada is one of the largest financial moves you will ever make, and the CRA offers a meaningful reward for taking that step: the First-Time Home Buyers' Tax Credit (HBTC), worth up to $1,500 in federal tax relief on your 2025 return. If you purchased a qualifying home in the 2025 tax year and have not previously owned a principal residence in Canada, this non-refundable credit is yours to claim at line 31270 of your T1 — and it takes only minutes to add when you file. This guide walks through every detail: who qualifies, what counts as a qualifying home, how to split the credit with a spouse or common-law partner, the important disability exception, and how the HBTC compares to the Home Buyers' Plan (HBP).
The Home Buyers' Tax Credit is a federal non-refundable tax credit introduced in 2009 and significantly expanded in the 2022 federal budget. For the 2025 tax year, eligible buyers can claim $10,000 on line 31270 of their T1 General return. Because the credit is calculated at the lowest federal tax rate of 15%, the actual dollar reduction in the tax you owe is:
$10,000 × 15% = $1,500 federal tax credit
It is important to understand that the HBTC is non-refundable. This means it can reduce your federal tax payable to zero, but it will not generate a refund on its own if your tax bill is already nil. If you have a tax balance owing of, say, $900, the credit eliminates that balance — but the remaining $600 of credit does not come back to you as a cheque. The credit applies only against federal tax; it does not reduce provincial tax directly. Alberta has no equivalent provincial first-time buyer credit, so for Albertans the full benefit is the $1,500 federal reduction.
To be considered a first-time buyer under the Income Tax Act, neither you nor your spouse or common-law partner (CLP) can have owned and lived in another home in Canada at any time during the four preceding calendar years. The look-back window for a 2025 purchase therefore covers 2021, 2022, 2023, and 2024. If you owned a home in 2020 or earlier but sold it before 2021 and rented since, you are eligible again.
There is a meaningful exception to the first-time buyer rule. If you or a related person with a disability — defined as someone eligible for the Disability Tax Credit (DTC) — purchased a more accessible or functional home for that person, you can claim the HBTC even if you already own a home. This provision, sometimes called the Accessible Dwelling for a Person with a Disability exception, recognises that families supporting a person with a disability may need to move to a better-suited property without losing the credit. The same $10,000 amount and 15% calculation apply.
A qualifying home is any new or existing residential property located in Canada that you register under applicable provincial or territorial property registration laws. This includes:
The purchase price of the home is irrelevant — there is no price ceiling on homes that qualify for the HBTC. Whether you buy a $350,000 condo in Calgary or a $1.2 million detached house, the credit amount is fixed at $10,000 (yielding $1,500).
Claiming the credit is straightforward. On your 2025 T1 General return, enter $10,000 on line 31270 (Home buyers' amount). This flows through Schedule 1 (Federal Tax), where it is multiplied by 15% to arrive at the $1,500 credit, which then reduces your federal tax payable at line 35000 of Schedule 1.
You do not attach any supporting documents to your return, but you should keep your purchase and sale agreement, land transfer documents, and closing statement in your records in case the CRA requests them later. Standard CRA record-keeping rules suggest retaining these for at least six years.
If you purchased the home jointly with your spouse or common-law partner, the $10,000 amount can be split between both returns in any proportion, as long as the combined total claimed across both returns does not exceed $10,000. The resulting credit on each return is then that person's share multiplied by 15%. This flexibility is useful if one partner has a larger tax payable — you can allocate more of the credit to the return where it will generate the greatest actual reduction.
For example, if Partner A owes $1,200 in federal tax and Partner B owes $400, you could claim $8,000 on Partner A's return ($1,200 credit) and $2,000 on Partner B's return ($300 credit), using the full $1,500 combined benefit.
Many first-time buyers confuse the HBTC with the Home Buyers' Plan (HBP). They are separate programs and you can use both in the same year. The table below compares them side by side.
| Feature | HBTC (Line 31270) | Home Buyers' Plan (HBP) |
|---|---|---|
| What it is | Non-refundable federal tax credit | RRSP withdrawal program |
| Dollar benefit | $1,500 reduction in federal tax owed | Up to $35,000 withdrawn tax-free (per person) |
| How you receive it | Lower tax bill / larger refund at filing | Cash from your RRSP for the down payment |
| Repayment required? | No | Yes — repay over 15 years or include in income |
| RRSP funds needed? | No | Yes — funds must be in RRSP 90+ days before withdrawal |
| First-time buyer rule | Same 4-year look-back (with disability exception) | Same 4-year look-back (with disability exception) |
| Spouse/CLP splitting | Yes — up to $10,000 combined | Yes — each spouse can withdraw up to $35,000 |
| Where claimed on T1 | Line 31270 | T1028 / Schedule 7 |
| Alberta provincial equivalent | None | None |
Using both programs together is a smart strategy. You withdraw RRSP funds under the HBP for your down payment, then claim the HBTC on the same return to reduce the federal tax you owe for the year of purchase. Neither program disqualifies you from the other.
Unlike some other provinces, Alberta has no provincial first-time home buyer tax credit to stack on top of the federal HBTC. British Columbia, for example, offers a Property Transfer Tax exemption on homes under certain thresholds. In Alberta, the provincial benefit for first-time buyers is limited to the federal credit alone. This makes it especially important for Alberta buyers to claim every available federal deduction and credit, including the HBTC, the Home Buyers' Plan if applicable, and any mortgage interest relief available through other programs.
Calgary buyers should also be aware that land transfer fees in Alberta (known as land title transfer fees) are significantly lower than in provinces like Ontario, which helps offset some of the cost difference. Still, maximising the HBTC is a straightforward step that requires no additional spending — only an accurate T1 filing.
Can I claim the HBTC if I bought a rental property that I plan to live in eventually?
No. The CRA requires that you or a related person with a disability intend to occupy the home as a principal residence within one year of closing. If you purchase the property purely as a rental investment with no intention of living there yourself, the HBTC does not apply. The intent must exist at the time of purchase, not at some indefinite future point.
My spouse owned a home before we married. Do I still qualify as a first-time buyer?
It depends on timing. The four-year look-back rule applies to both you and your current spouse or common-law partner. If your spouse owned and occupied a home at any point in the four calendar years before your purchase year, neither of you qualifies for the HBTC as first-time buyers (unless the disability exception applies). If the previous ownership was more than four years ago and your spouse has not owned since, both of you are eligible again.
We bought in late December 2025 and haven't moved in yet. Can we still claim the HBTC on our 2025 return?
Yes. What matters for the HBTC is the date you acquired (closed on) the property, not the date you physically moved in. As long as the closing occurred in 2025 and you intend to occupy the home as your principal residence within one year, you can claim $10,000 at line 31270 on your 2025 T1 return. Keep your closing documents as proof of the acquisition date.
Is the $1,500 HBTC the same as the $10,000 First Home Savings Account (FHSA) contribution room?
No — these are completely separate programs. The HBTC is a tax credit claimed after purchase; the First Home Savings Account (FHSA) is a registered savings account you contribute to before purchasing, allowing up to $8,000 per year (lifetime maximum $40,000) in tax-deductible contributions. FHSA withdrawals for a qualifying home purchase are tax-free. You can use the FHSA, the HBTC, and the HBP together in the same purchase year, making a first home purchase one of the most tax-advantaged financial events available to Canadians.
The HBTC is one of the simplest credits to claim, but first-time buyers often leave money on the table by missing related opportunities — the FHSA deduction, the HBP repayment schedule, or the optimal split of the credit between spouses. At Swift Accounting and Business Solutions in Calgary, our personal tax team reviews every qualifying credit and deduction before filing your T1, so your first-home purchase is reflected accurately and to your maximum advantage. Contact Swift Ltd today to book a consultation and make sure your 2025 return captures every dollar you are entitled to.