I signed a prenuptial agreement with my now ex-husband that I would not claim ownership of his house he bought before the marriage. I did not receive any money related to the house when I left.
When we divorced, I had to look for a house. I bought a house for myself and I wonder if I can apply for the tax credit for first-time buyers on the house if I lived in the ‘marital’ house during our marriage, but did not own the ‘marital’ house.
How a Divorce Can Affect Buying a Home, Especially for the Starter?
The tax credit you refer to, Shawna, is the homebuyer’s amount (line 31270 of your tax return). An eligible taxpayer can claim $5,000 if they purchased an eligible home during the tax year.
A qualifying home is virtually any home purchase, including a house, apartment, or even a mobile home. The caveat is that you must plan to occupy the house no later than one year after you have acquired it. The property must also be registered in your name (or that of your spouse or (if applicable) cohabiting partner under the applicable land registry system. The property must be located in Canada.
I think where you come across a roadblock, Shawna, owning your ex-husband’s house will disqualify you. A taxpayer can only claim the home buyer’s amount if both conditions are met:
You (or your spouse or cohabiting partner) have acquired a qualifying home. You did not live in another home of yours (or your spouse or cohabiting partner) in the year of acquisition or in one of the four previous years (first time buyers on the housing market).
Even though your husband is now your ex-husband, you have lived in his house for the past four years. As a result, despite the prenuptial agreement and the lack of direct ownership or financial advantage, you cannot claim the home buyer’s amount.
For what it’s worth, the $5,000 credit isn’t all it is. You only get a 15% tax credit or refund on this $5,000 credit, so $750.
This post Buying a house after divorce
was original published at “https://www.moneysense.ca/columns/ask-a-planner/buying-a-home-after-divorce/”