Homeownership in Canada offers various financial benefits, including tax credits and deductions that can significantly reduce your tax liability. This guide provides a comprehensive overview of nine homeowner tax credits available to Canadian homeowners.
1. First-Time Home Buyers’ Tax Credit (HBTC)
- Available to first-time homebuyers who have not owned a home in the past four years.
- Provides a non-refundable tax credit of $10,000, reducing your tax bill by $1,500.
- Must meet eligibility criteria, including being a resident of Canada and using the home as your primary residence.
2. Home Buyers’ Tax Credit for Persons with Disabilities
- Available to individuals with disabilities or their spouses/common-law partners.
- Provides a non-refundable tax credit of $10,000, reducing your tax bill by $1,500.
- Must meet eligibility criteria, including having a disability that limits your ability to perform daily living activities.
3. Home Buyers’ Plan (HBP)
- Allows first-time homebuyers or previous homeowners who have not owned a home in the past four years to withdraw up to $35,000 tax-free from their RRSPs.
- Funds must be used towards a down payment on a qualifying home.
- Withdrawals must be repaid within 15 years, starting two years after the withdrawal.
4. GST/HST New Housing Rebate
- Available to individuals who purchase a newly built or substantially renovated home.
- Provides a rebate of a portion of the GST/HST paid on the purchase price.
- The rebate amount varies depending on the purchase price and location of the home.
5. Home Accessibility Tax Credit (HATC)
- Available to individuals who renovate their homes to make them more accessible for individuals with disabilities.
- Provides a non-refundable tax credit of up to $20,000 for eligible renovations.
- Must meet eligibility criteria, including having a disability or being a family member of an individual with a disability.
6. Rental Income Deductions
- Available to individuals who rent out a portion of their property.
- Allows homeowners to deduct certain expenses related to the rental property, such as property taxes, insurance, and repairs.
- Deductions can reduce the amount of rental income subject to tax.
7. Deductions from Moving for Work or School
- Available to individuals who move more than 40 kilometers for work or school.
- Allows homeowners to deduct eligible moving expenses, such as transportation costs, temporary living expenses, and legal fees.
- Deductions can reduce the amount of income subject to tax.
8. Homeowner Tax Deduction When You Work from Home
- Available to individuals who work from home on a regular basis.
- Allows homeowners to deduct a portion of their eligible home expenses, such as utilities, insurance, and property taxes.
- Deductions can reduce the amount of income subject to tax.
9. New in 2023: Multigenerational Home Renovation Tax Credit
- Available to individuals who construct a secondary suite in their home for a family member who is a senior or an adult with a disability.
- Provides a non-refundable tax credit of up to $7,500 for eligible renovations.
- Must meet eligibility criteria, including having a qualifying family member and completing the renovations by December 31, 2025.
Taking advantage of these homeowner tax credits can significantly reduce your tax liability and provide financial benefits. It is important to carefully review the eligibility criteria and requirements for each credit to determine which ones you qualify for. By maximizing these tax credits, you can save money on your taxes and make homeownership more affordable.
Tax Benefits of Buying a Home 2024 | Tax Benefits of Owning a Home | Tax Savings for Homeowners
FAQ
Do you get a big tax return when you buy a house?
What are the tax implications of buying a house in Canada?
How long do you need to live in a house to avoid capital gains tax Canada?
What house expenses are tax deductible in Canada?
Can I claim a home buyer’s amount on my tax return?
Claim $5,000 on your tax return – You may be able to claim $5,000 on your tax return with the home buyers’ amount if you recently bought a qualifying home. To claim it, you must not have lived in another home owned by you or your spouse or common-law partner in 2015 through to the day before the qualifying home was bought in 2019.
Can a home buyer claim $5,000 on a 2017 tax return?
Eligible home buyers can claim $5,000 on line 369 of Schedule 1 of their income tax and benefit return for the acquisition of a qualifying home in 2017. You may qualify for the home buyers’ amount if you did not live in another home owned by you or your spouse or common-law partner in 2017 or in any of the four preceding years.
Can I claim property tax if I rented a house?
For example, if you rented the whole year, you can claim all your property taxes, if you only rented for half the year, you could claim half. The same may be true for renting a portion of your home – rent only a quarter of your home out and you can only claim a quarter of your property tax at most.
Can I claim property taxes if I own a house?
If you own your home, you can claim the mortgage interest and the property taxes that are related to the section of the house you used for business. For example; If your total house size is 2500 ft2, and your office space is 300 ft2, you can claim the following percentage of your home expenses: Percentage of house use = 300 / 2500 = 12%