I signed a prenuptial settlement with my now ex-husband that I might not declare possession of his home he purchased earlier to the wedding. I didn’t obtain any funds regarding the home after I left.
After we divorced, I wanted to discover a home. I bought a house for myself, and I’m questioning if I can apply for the first-time dwelling consumers’ tax credit score if I occupied the ‘marital’ dwelling throughout our marriage however had no possession of the “marital” dwelling.
—Shawna
How a divorce can have an effect on shopping for a home, particularly for the first-time purchaser
The tax credit score you might be referring to, Shawna, is the house consumers’ quantity (line 31270 of your tax return). An eligible taxpayer can declare $5,000 in the event that they bought a qualifying dwelling in the course of the tax 12 months.
A qualifying house is just about any dwelling buy, together with a home, apartment or perhaps a cellular dwelling. The caveat is that you should intend to occupy the house by no later than one 12 months after you purchase it. The house should even be registered in your title (or that of your partner or widespread legislation associate, if relevant) in accordance with the relevant land registry system. The house should be positioned in Canada.
I feel the place you’ll run right into a roadblock, Shawna, is that your ex-husband’s possession of a house will disqualify you. A taxpayer can solely declare the house consumers’ quantity if each of those situations are met:
- You (or your partner or common-law associate) acquired a qualifying dwelling.
- You didn’t reside in one other dwelling owned by you (or your partner or common-law associate) within the 12 months of acquisition or in any of the 4 previous years (first-time dwelling purchaser).
Regardless that your husband is now your ex-spouse, you probably did reside in a house owned by him in the course of the earlier 4 years. This can disqualify you from claiming the house consumers’ quantity, regardless of the pre-nuptial settlement and the shortage of direct possession or monetary profit.
For what it’s value, the $5,000 credit score shouldn’t be all it’s cracked as much as be. You solely get a tax discount or refund of 15% of this $5,000 credit score, so $750.