Spring is here, and with it comes tax season! Whether you're a homeowner settling into your first place or a seasoned resident making improvements, understanding available tax credits can significantly benefit you.
This guide explores some key tax benefits for Canadian homeowners and first-time buyers:
Recovering Housing Taxes:
- GST/HST New Housing Rebate: Get back a portion of the GST or HST paid on new or substantially renovated homes. This applies to buyers, builders, and those undertaking major renovations on their primary residence.
Tax Breaks for First-Time Buyers:
- First-Time Home Buyers' Tax Credit (HBTC): This non-refundable credit of up to $10,000 can reduce your tax bill by $1,500. To qualify, neither you nor your spouse or common-law partner can have owned a qualifying home in the past four years.
Making Your Home Accessible:
- Home Accessibility Tax Credit (HATC): If you're making renovations to improve accessibility for seniors or individuals with disabilities, this credit offers a 15% relief on up to $10,000 in qualifying expenses, providing up to $1,500 in annual tax savings.
Creating a Multigenerational Home:
- Multigenerational Home Renovation Tax Credit: Thinking of creating a separate living space for a senior family member or an adult with a disability? This credit offers up to $7,500 in tax relief for eligible renovation costs.
Tax Benefits for Landlords:
- Rental Income Deductions: If you own rental property, you can deduct various expenses related to generating rental income, including mortgage interest, property taxes, maintenance costs, utilities, and insurance.
Important Note:
This is not an exhaustive list, and some provinces may offer additional benefits.
Canada's Underused Housing Tax (UHT):
Introduced in 2022, the UHT applies a 1% tax on vacant or underused foreign-owned residential properties. If you have rental properties, properties held in partnerships, or properties in bare trust agreements, consult a tax professional to ensure you comply and avoid penalties.
Need Help?
If you have questions about these credits or require more personalized advice, don't hesitate to reach out. We can also connect you with a certified tax professional for further guidance on maximizing your home-related tax benefits.