Tips & advice

Claim rent and receive a tax credit

Did you pay rent in 2009? Do you live in Ontario, Manitoba, or Québec? If you can answer yes to both of these questions, you might be receiving some tax credit soon.

Many people know about the homebuyers’ tax credit, but the potential tax credit for paying rent is a lesser known benefit. This is probably because paying rent does not affect federal income taxes.

Since the tax credit is only open to residents of the aforementioned provinces, your chances of receiving it might be small but the savings could be big.

Any taxpayers above the age of 16 who were Manitoba residents on December 31, 2009 and paid more than $1,250 in rent are eligible to claim the Education Property Tax Credit. But roommates should be warned that only one person can claim this amount on their tax returns.

Manitoba residents can find some considerable cash savings with this tax credit. Renters under the age of 65 can receive credit for up to $675, with a minimum saving set at $650 depending on income. For residents over the age of 65, the minimum amount does not change, but you might earn up to $800 in credit.

The Education Property tax credit in Manitoba is akin to the Property Tax Credit in Ontario. If you were a rent-paying Ontario resident above the age of 16 on December 31, 2009 you can claim this tax credit.

Ontario renters under 65 will receive either $250 or 20 percent of the rent paid – whichever is less. For Ontario renters above the age of 65, the maximum credit increases to $625. An additional benefit for Ontario residents is the option to combine the Property Tax Credit with the Sales Tax Credit. This maxes out at $1,000 for people under 65 and $1,125 for people over 65. Again, this credit depends on your level of income so the more you earn, the credit gets smaller.

Last but not least, renters in Québec stand to gain tax credits thanks to the Relevé 4. Québec renters who were residents on December 31, 2009 should receive a Relevé 4. This will include information about your December rent and your portion of property taxes. The maximum property tax refund available is $602 for 2009.

Hopefully, this insight will help renters receive every penny they deserve this tax season.