Owning a home can be exciting and also comes with a lot of responsibility. However, there are quite a few perks to being a homeowner, one of them being the tax breaks. There are a variety of tax credits designed to lighten the financial load for homeowners, making homeownership a bit more affordable. Whether you’re purchasing your first home, making your property more accessible, or even moving for work, there’s likely a tax credit for you. In this article, we’ll dive into the homeowner tax credits every Canadian should know about to maximize their savings this tax season.
1. First-time Home Buyers’ Tax Credit
If you’re venturing into homeownership for the first time, the First-time Home Buyers’ Tax Credit can provide up to $750 in tax relief, helping to cover some of the legal, inspection, and financial fees associated with buying a home.
If you, your spouse, or your common-law partner live with a disability according to the CRA’s eligibility requirements, you can still qualify for this credit even if your current home is not your first one.
2. Home Accessibility Tax Credit
The Home Accessibility Tax Credit allows you to claim a portion of expenses related to eligible home modifications, ensuring safety and less harm for qualifying individuals living under your roof.
3. Home Buyers’ Plan
The Home Buyers’ Plan is a unique program that lets you withdraw up to $35,000 from your RRSP to buy or build a qualifying home for yourself or a related person with a disability, tax-free.
4. GST/HST New Housing Rebate
Building or buying a new home? You might be eligible for the GST/HST New Housing Rebate, which offers a refund on a portion of the GST or the federal part of the HST paid on the purchase price or cost of building a new house.
5. Rental Income Deductions
Homeowners who rent out a portion of their home can deduct certain expenses from their rental income, such as maintenance, utilities, and insurance, potentially lowering the tax owed.
6. Moving for Work or School
If you’ve had to move at least 40 kilometers closer to work or school, you’re eligible to claim moving expenses to help offset some of those costs, from transportation to temporary living expenses.
7. Multigenerational Home Renovation Tax Credit
To support families living under one roof, the Multigenerational Home Renovation Tax Credit offers a tax break for renovations that make homes more accessible for elderly family members or those with disabilities, promoting safety and comfort for all generations.
8. Home Office Rebate
With the rise of remote work, the Home Office Rebate has become increasingly relevant, allowing employed individuals who work from home to deduct a portion of their home office expenses.
9. Capital Cost Allowance Deduction
For those who own rental properties, the Capital Cost Allowance Deduction can be a game-changer, offering a way to claim depreciation on the property, thereby reducing the taxable income generated from rental operations.
These homeowner tax credits can definitely help reduce your tax bill! From first-time buyers to seasoned investors, these credits and deductions are designed to alleviate the financial burden that often comes with homeownership. Remember, it’s important to consult with a tax professional to ensure you’re taking full advantage of these opportunities and to stay updated on any changes to tax laws.