As the April tax deadline approaches, understanding the plethora of tax credits available can be a game-changer for homeowners and first-time buyers.
Whether you're stepping into your first home or you're a seasoned homeowner, being aware of these deductions and programs can significantly impact your tax filings and maximize your return this season.
GST/HST new housing rebate
- What is it? Recoup a portion of the GST or the federal part of the HST paid for new or renovated homes.
- Eligibility: Buyers of new homes, constructors of homes, or individuals who have majorly renovated their primary residence.
- Qualifying homes: New or substantially renovated primary residences.
- Claim process: Submit your claim within two years after the purchase or completion of renovations.
First-Time Home Buyers' Tax Credit (HBTC)
- What is it? A $10,000 non-refundable tax credit for eligible first-time home buyers, offering up to $1,500 in tax relief.
- Eligibility: First-time homebuyers or those who haven’t owned a home in the previous four years, including the buyer's spouse or common-law partner.
- Qualifying homes: Primary residences in Canada.
- Claim process: Claimed in the tax year when the home is purchased, on line 31270 of your tax return.
Home Accessibility Tax Credit (HATC)
- What is it? Offers a 15% non-refundable tax credit on up to $10,000 of eligible home renovation expenses, for a maximum of $1,500 in tax relief per year.
- Eligibility: Homeowners making accessibility-related renovations to accommodate seniors or individuals with disabilities.
- Qualifying renovations: Changes made to improve accessibility or help a senior or a person with a disability be more functional or mobile at home.
- Claim process: Claimed in the tax year when the expenses were incurred.
Multigenerational home renovation tax credit
- What is it? Provides up to $7,500 in tax relief for eligible renovations to accommodate a senior family member or an adult with a disability.
- Eligibility: Homeowners undertaking renovations to create a secondary dwelling for a senior or a person with a disability.
- Qualifying renovations: Renovations that enable the senior or adult with a disability to live with a relative in a secondary dwelling.
- Claim process: Available for expenses incurred after the tax year it was introduced.
Rental income deductions
- What is it? Allows landlords to deduct expenses related to generating rental income, including mortgage interest and property taxes.
- Eligibility: Property owners who earn rental income from residential or commercial properties.
- Qualifying expenses: Mortgage interest, property taxes, maintenance costs, utilities, and insurance.
- Claim process: Expenses are deducted in the tax year they are incurred.
Note this list isn't exhaustive, and specific provinces may offer additional deductions and credits not covered here.
Notice on Canada's Underused Housing Tax (UHT)
Effective since 2022, Canada's UHT imposes a 1% tax on underused foreign-owned properties, though it also has tax filing implications for those with rental units, or with properties held in partnerships or bare trust agreements, in order to claim exemptions. Anyone impacted by this tax is strongly encouraged to consult a tax professional to ensure adherence and avoid penalties.
If you have any questions about navigating these tax credits, please don't hesitate to reach out.
Should you need more detailed tax advice, I'd be happy to refer you to a certified tax professional who can provide you with personalized guidance and inform you of other programs that may apply to your situation. Let's make sure you're getting the most out of your home-related tax opportunities this season!