With only a few more weeks until the income tax filing deadline, it’s a good idea to make sure that you have a clear understanding of all available tax credits. It is especially important to take full advantage of any tax deductions and rebates offered to you as a Homeowner.
First-Time Home Buyers’ Tax Credit (HBTC)
If you are a first-time home buyer, you can claim a non-refundable tax credit to a maximum of $750. This non-refundable tax credit is based on a percentage of $5,000. So if this is your first experience with home ownership, then take advantage. If you bought with a partner, and you both qualify, you can split the tax credit 50/50 at $2,500 each.
GST/HST New Housing Rebate
If you bought a new home that cost less than $450,000 or you renovated your home extensively and live in it as your principal residence, you may be able to claim the GST or HST under the new housing rebate. There are even tax deductions for homeowners who built their own homes, as well as income property homes.
The Home Buyer’s Plan
The Home Buyer’s Plan allows those who plan to purchase a residence to withdraw up to $25,000 from their RRSP (Registered Retirement Savings Plan) to help with the purchase or even the construction of a home. The money can be repaid over a 15-year period without penalty. If you used the Home Buyers’ Plan and withdrew money from your RRSP for your down payment, you must fill out and specific forms with your tax return.
If you are renting out a property you own or that you are currently using; you may report your rental income and claim certain expenses like advertising, insurance, maintenance, utilities and interest on the money you borrow to make improvements to the property.
Working from home
If you work from home and pay taxes on business income, you can claim a portion of the cost of heating, home insurance, electricity, phone and internet, and even cleaning appliances as expenses.
Medical Expense Tax Credit
If you have a mobility impairment, you can claim expenses to make your home more accessible. Keep in mind, however, that medical expense reimbursement has to fall within a 12-month period ending in the current tax year. When it comes to medical expenses, make sure you call the CRA and find out which expenses qualify, before you file your return.
Selling your home
Typically the taxes do not apply when you sell your home, however there are a couple of instances where you may have to pay taxes. For example if you built the home you have sold or if you sold a home that you don’t currently live in, then you may have to pay the GST or HST. Make sure you check, it's better not to have surprises.
Provincial Tax Credits
As an Ontario Homeowner, your are entitled to claim the Ontario Property Tax Credit for taxes paid to your municipality. Seniors are also specifically entitled to the Senior Homeowner’s Property Tax Credit.There are also other tax deductions available on a province by province basis; for example, builders in Ontario are able to recover the HST on the lumber and materials purchased to build or renovate a home and there are a few moving tax deductions available as well. To find out more information about credits available in Ontario, check out the Provincial page on the CRA website.
Be sure to seek out a professional when preparing your taxes to inquire about all the tax deductions available to you, it may surprise you to know how much money can be recovered simply through homeownership.