As a Canadian homeowner, you’ve got plenty of bills to pay. In addition to your mortgage, you’re also responsible for all those utility bills, property insurance, property taxes, and maintenance costs associated with operating a home.
The good news is that you might qualify for some tax breaks that can help offset some of the many expenses you’re obligated to pay on a regular basis. Canadian homeowners have a number of home tax deductions that they may claim come tax time.
Are you a self-employed individual? Here are some tax concerns you should know about.
Are you buying your very first home? If so, you’ve got the opportunity to take advantage of the First-Time Homebuyer Tax Credit on your new home purchase. This non-refundable tax credit – which can be claimed up to a maximum of $750 – was introduced to help Canadians purchase their first home and was designed to help recoup the mounting closing costs associated with buying a home, such as home inspections, land transfer taxes, and legal expenses.
Once you purchase your first house, the credit needs to be claimed within the year that you bought your home. The property must also be eligible for this tax credit and must meet the following criteria:
In addition, you need to meet some criteria yourself before being approved for this tax credit:
To claim this $750 first-time homebuyer tax credit, you’ll need to include it with your tax return under line 369.
Click here to learn the difference between a tax credit and a tax deduction in Canada.
If you are a senior, you’ll want to make sure that your home is safe and easily accessible, especially if you or your spouse have any mobility issues. While making improvements to your home to make it more appropriate for you may be expensive, you may be able to recover some of these costs thanks to the Home Accessibility Tax Credit (HATC) up to a maximum of $20,000. This non-refundable tax credit can be applied to qualifying expenses associated with any work performed or materials purchased to complete a qualifying renovation.
Like the HBTC tax credit, both you and the property need to meet specific requirements in order to be eligible. You must meet any one of the following:
As far as the last eligibility requirement is concerned, you may be entitled to claim the HATC tax credit if you’re supporting someone who is eligible for it. For instance, if you’re not a senior but are supporting one, such as an elderly parent who lives with you, and you spend $5,000 to make your home wheelchair accessible, you may be able to claim that amount on behalf of your parent on your own personal tax return.
Want to know how much it costs to buy a house in your province or city? Check out this infographic.
Similar to the HATC, the Medical Expenses Tax Credit allows you to claim up to a certain amount to make your home more easily accessible if you or anyone in your home has any mobility issues. This refundable credit is 25% of any qualifying medical expenses, up to a certain amount. It is lowered by 5% of your income (and your spouse’s/partner’s) in excess of $26,277 per family.
The Canadian government lists all the eligible medical expenses that can and cannot be claimed on their website.
If you buy a newly constructed home, you will have to pay GST or HST on the purchase price, just like you would with just about every product you buy. While this can certainly add up to a sizeable amount, you might be able to get most of that money back when it comes time to file your taxes.
You might be eligible to claim the GST/HST that you paid for the property through the GST/HST new housing rebate if the home you buy is your principal residence and is less than $450,000. Residents of Ontario and British Columbia have the added benefit of claiming the provincial portion of HST if they purchase, build, or make major home improvements on their homes.
Want to learn more about home builder’s mortgages and how to get one? Read this.
A rental property that brings in income from rent cheques may be eligible for tax credits. If you own an investment property that is rented out, you can report the rental income and claim certain expenses, such as property insurance, marketing the property to attract occupants or interest paid on any money borrowed to purchase or update the property. You can claim such expenses by using tax form T776.
Thinking about renting? Check out what is a rent-to-own home?
More and more people are telecommuting for work these days, giving them the flexibility to work from wherever they choose, including at home. If you work from your own home office, there are several expenses that you can deduct when filing your taxes. These can include a percentage of:
Does owing taxes to the CRA affect your credit score? Find out here.
Considering all the potential tax breaks you may get as a homeowner, it’s worth taking the time to speak with your tax advisor or accountant to find out what types of credits you might be eligible for. You might just be able to get a few thousand dollars back in your pocket, which can come in handy to help cover the myriad of expenses related to owning and operating a home.
Rating of 4/5 based on 11 votes.
Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Don’t pay until March with this offer from our partner, Fairstone.* Ends January 31st.
New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.
Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.
With KOHO’s prepaid card you can build a better credit score for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.
