Starting in 2009, the federal government introduced a new tax credit, based on a downpayment amount of $5,000, for first time home buyers that buy a qualifying home in the year the home is purchased.
The Home Buyers Tax Credit is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, this amount is $750.
You, and anyone you purchase the home with, must be considered a first time home buyer to be eligible for the tax credit. The home must be used as your principle residence, and if you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it). However, the combined total cannot exceed $750.
If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first time home buyer. See the Government of Canada website for further details.
No. Although some of the eligibility conditions are the same for the Home Buyers Tax Credit and the First Time Home Buyer's Plan, they are two different programs. Your eligibility for the Home Buyers Tax Credit will not change whether or not you also participate in the First Time Home Buyer's plan, and you can participate in both, if you qualify. To qualify, the RRSP funds you're using must be on deposit for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.