As a homeowner in Canada, you may be entitled to various Federal and Provincial tax deductions that can help you offset the ongoing cost of home ownership. With tax season just around the corner, now is the perfect time to learn about the tax credits available to you.
Here are some of the most common homeowner tax credits you may be eligible for:
1. First-Time Home Buyers’ Tax Credit (HBTC):
If you purchased a home for the first time in Canada, you may be eligible for the HBTC. This tax credit allows you to claim up to $10,000 in expenses related to your home purchase in 2022.
2. Home Buyers’ Plan (HBP):
As of April 16, 2024, as a first-time home buyer, you may withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home under the HBP. Before, the withdrawal limit for the HBP was $35,000 This program allows you to borrow money from yourself without tax penalties. However, withdrawals not paid back within 15 years will become taxable.
3. GST/HST New Housing Rebate:
If you’ve recently purchased a newly constructed home or performed substantial home renovations, you may be eligible for a new housing rebate on some of the GST/HST paid on the purchase price. Typically, this only applies to homes with a fair market value of up to $450,000.
4. Home Accessibility Tax Credit (HATC):
If you made renovations to your home to make it more accessible for a senior or a person with a disability, you may be eligible for the HATC. This tax credit allows you to claim up to $20,000 in expenses related to renovations that improve accessibility.
5. Medical Expense Tax Credit (METC):
This refundable credit on qualifying medical expenses allows you to claim up to a certain amount (as much as 25%) to make your home more easily accessible if you or anyone in your home has any mobility issues.
6. Rental Income:
If you are renting out real estate, including farmland, you must claim rental income on your taxes. As such, you may claim allowable expenses related to the property, such as advertising fees, property taxes, insurance, and any interest on money borrowed to purchase or renovate the rental.
7. Work from Home (Home Office):
If you work remotely or run a business out of your home, there are some extra expenses that you can deduct, including utilities, insurance, internet, etc. However, this amount must correspond with the percentage of the home used for the business.
These are just a few examples of the tax credits available to Canadian homeowners. By taking advantage of these tax credits, you can save money on your taxes and invest that money back into your home.
Learn more about these tax credits and how to claim them by visiting the Canada Revenue Agency’s website or consulting with a tax professional.
