2016 is flying by already, and here comes Tax Time just around the corner. So, some tips ...
According to a recent survey, 42% of Canadians are hesitant to talk about the value of their homes. What’s even more incredible is that 34% of Canadians think it’s impolite to talk about money. When it comes to tax deductions, however, Canadian homeowners are all willing to speak up.
When it comes to tax time, most of us cringe at the thought of handing even more money over to the government, but rejoice, Canadian homeowners, because there are several home tax deductions that you can claim.
Tax deduction #1
First-time home buyer
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 foray into home ownership, then take advantage.
Tax deduction #2
Renovations for medical reasons
Those with mobility issues who had renovations done to accommodate it can claim this as an expense that was required in order to make their 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.
Tax deduction #3
New home rebate
If you bought a new home that cost less than $450,000 or you renovated your home extensively and live in it (it’s 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 for rental homes. Speak to your accountant about how it may apply to you in your respective province.
Tax deduction #4
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 best part is that you can pay it back over a 15-year period without penalty.
Tax deduction #5
Allowable expenses for rentals
Renting out a property you own or that you are currently using? Report your rental income and claim allowable expenses like advertising, insurance and interest on the money you borrow to make improvements.
Tax deduction #6
Working from home
If you work from home and pay taxes, you can claim heating, home insurance, electricity and even cleaning appliances as expenses.
Tax deduction #7
Selling your home
Typically, the taxes do not apply when you sell your home, but there are cases where it does. If you built the home or sold a home that you don’t currently live in, then you may have to pay the GST or HST. However, there are a few moving tax deductions available that you may want to take advantage of.
Other tax deductions for Canadian homeowners
There exist other tax deductions that are available on a province by province basis, such as builders in Ontario and B.C. being able to recover the HST on the lumber and materials purchased to build or renovate a home, or the Manitoba homeowner’s home tax credits.
Inquire about all the tax deductions available to you and you may be surprised at how much money you can recover just by being a homeowner.