Owning a home in Canada can be very expensive and very rewarding at the same time. As a homeowner, there are some Federal and Provincial tax deductions and tax credits which, depending on your situation, may be available for you to claim.
Home Buyers’ Amount (Formerly known as Home Buyer’s Tax Credit)
You can claim $5,000 for the purchase of a “qualifying home” if both of the following apply:
- you or your spouse or common-law partner acquired a qualifying home; and
- you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
Qualifying home – Must be registered in your and/or your spouse / common-law partner’s name in accordance with the applicable land registration system and located in Canada. Includes existing homes and homes under construction.
The $5,000 can be split between the house owners as long as the total amount claimed on all tax returns doesn’t exceed $5,000. The credit is claimed on line 31270 on your income tax and benefits return (previously line 369).
The following are considered qualifying homes:
- single-family houses;
- semi-detached houses;
- mobile homes;
- condominium units; and
- apartments in duplexes, triplexes, fourplexes, or apartment buildings.
Home Accessibility Tax Credit (HATC)
Renovations or expenses incurred which make homes safer or more accessible for Canadians 65-years of age or older, or for the disabled people of any age may qualify for the HATC provided they are being claimed by the eligible individual or by someone who looks after the individual and meets all of the CRA’s requirements. Up to $10,000 in expenses can be claimed under the HATC. Since this is a non-refundable tax credit, you are eligible to receive 15% of the renovation costs as a reduction on your taxes.
Medical Expenses Tax Credit
Persons with mobility impairments can claim renovation expenses to make their home more accessible under medical expenses deductions in Canada. The government provides an extensive list of eligible medical expenses as well as medical expenses that you cannot claim.
GST/HST New Housing Rebate
You may be eligible for a new housing rebate for some of the GST/HST paid if you are an individual who:
- Purchased new housing or constructed or substantially renovated housing for use as your (or your relation’s) primary place of residence
- Purchased shares in a co-op complex for the purpose of using a unit as your (or your relation’s) primary place of residence
- Constructed or substantially renovated your own home, or hired someone else to construct or substantially renovate your home for use as your (or your relation’s) primary place of residence and the fair market value of the house when the construction is substantially completed is less than $450,000
Qualifying housing also includes mobile homes, modular homes and floating homes.
The GST/HST new housing rebate allows an individual to recover some of the GST or federal portion of the HST paid for a new or substantially renovated house that is for use as the individual’s, or their relation’s, primary place of residence, when all of the conditions are met.
Home Buyer’s Plan
The Home Buyer’s Plan allows you to withdraw up to $35,000 from your registered retirement savings plan (RRSP) to help with the purchase or construction of a home. Certain conditions apply. Submit a request by completing the T1036 tax form that is available.
GST/HST New Residential Rental Property Rebate
You may be eligible for the GST/HST New Residential Rental Property Rebate if you are a:
- landlord who purchased a newly constructed or substantially renovated residential rental property
- landlord who built your own residential rental property
- landlord who made an addition to a multiple-unit residential rental complex
- builder who had to account for the GST/HST under the self-supply rules because you sold a residential unit to an individual and leased the related land to that individual under a single written agreement (only available where the individual is entitled to claim the new housing rebate)
- person who had to account for the GST/HST under the self-supply or change-in-use rules because you made an exempt lease of land used for residential purposes (such as the rental of a residential lot or a site in a residential trailer park)
To be eligible for the new residential rental property rebate, the fair market value on the qualifying residential unit at the time tax was payable on the purchase or self-supply of the property must be less than $450,000 and for land or a site in a trailer park the fair market value must be less than $112,500.
The rental accommodation or land must be intended for long-term use as a residence.
The rebate will go to the person who paid the GST/HST – Landlord for rental accommodations or Lessor of the land for leased land.
For more information, visit the CRA’s Guide RC4231, GST/HST New Residential Rental Property Rebate.
If you rent real estate or other property, including farmland that you own or have use of, you will need to report the income to the CRA on Form T776, Statement of Real Estate Rentals, which allows you to claim allowable expenses such as advertising, insurance and interest on money you borrow to buy or improve the property.
Homeowners Who Work From Home
If you work from your home, there are a number of expenses that you can deduct if you are either self-employed, a commissioned employee or a professional.
The amount that you are eligible to claim corresponds to the percentage of the home used for the business and expenses which could be claimed include, but are not limited to:
- Utilities – heating, water and electricity
- Office supplies
- Cleaning supplies
Selling your Home
Generally, the GST/HST does not apply when you sell your home, but there are cases where it does. For example; if you built the home, you may have to pay the GST/HST. If the home you sell is not your principal residence, you have to report the capital gains. You also have to notify to the CRA that you have sold a property, and if you do not, there could be significant penalties and interest assessed against you.
You can claim eligible moving expenses if:
- you moved and established a new home to work or run a business at a new location; or
- you moved to be a student in full-time attendance in a post-secondary program at a university, college or other educational institution.
To qualify, your new home must be at least 40 kilometres (by the shortest usual public route) closer to your new work or school.
This deduction on line 21900 reduces your income before you apply your taxes. It can be carried forward to subsequent years if you don’t have enough income to deduct all the moving costs.
New Home Purchase
Generally, sales of new housing are subject to the GST/HST, however, you may qualify for the following rebate for some of the tax paid.
Provincial Tax Credits
Some Provincial tax credits include;
New Brunswick Seniors’ Home Renovation Tax Credit
New Brunswick – Seniors, 65 years or older, in New Brunswick, you could qualify for a tax credit to help with the cost of making their homes safer and more accessible. The New Brunswick Seniors’ Home Renovation Tax Credit is a refundable personal income tax credit for seniors and family members who live with them. Seniors who qualify can claim up to $10,000 worth of eligible home improvements on their tax return.
The amount of money they get back for these expenses is calculated as 10% of the eligible expenses claimed. For example, $10,000 spent would generate a $1,000 refund.
You are eligible to claim the credit for the year if on the last day of the tax year you are:
- a resident of New Brunswick, and
- a senior or a family member living with a senior.
Manitoba Education Property Tax Credit
Homeowners or renters who pay property tax may be eligible to save up to $700 with the Manitoba Education Property Tax Credit (EPTC), which is provided to help cover the school taxes you pay, or a portion of your rent either directly on your municipal property tax statement or through your income tax return.
Quebec Home Buyers Tax Credit
You may be entitled to a maximum $750 tax credit if you were resident in Québec on December 31, (or on the day in the tax year you ceased to be resident in Canada), and during that tax year, either:
- you or your spouse bought a qualifying home for the first time and you intend to make it your principal residence (note that you are considered to have bought a home for the first time if neither you nor your spouse owned another housing unit in which you lived in during the tax year or the previous four years); or
- you bought a qualifying home and intend to make it the principal residence of someone related to you who has a disability. The residence must either:
- be more accessible for the disabled person or set up to help the person be more mobile or functional, or
- provide an environment better suited to the person’s personal needs and care.
You can split the amount between everyone who is eligible to claim the credit for the same qualifying home.
For the complete list of conditions and to calculate the amount of the credit, use this form on the Revenu Quebec website, form TP-752.HA-V, Home Buyers’ Tax Credit.
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