Author:
Did you know the provincial and federal governments offer a number of credits and deductions geared at supporting Canadian homeowners in their real estate journeys? From credits to help with real estate financing to rebates geared at home repairs and renovations, here are five tax incentives Canadian homeowners have at their disposal, as well as information on provincial tax credits available to you.
1. Home Buyers’ Amount
The Home Buyers’ Amount—also known as the First-Time Home Buyers’ Tax Credit—is available to first-time home buyers who acquire a qualifying home, which includes:
single-family and detached homes;
townhomes;
mobile homes;
condos;
apartments in duplexes, triplexes and fourplexes; and
apartment buildings.
Eligible buyers can receive a tax credit of up to $1,500, and in order to qualify, buyers must simply fill out their annual tax return.
There are some exemptions, however. Canadians are not eligible for the credit if they’ve lived in another home owned by themselves, a spouse, or a common-law partner in the year of acquisition or any of the four preceding years.
2. GST/HST New Housing Rebate
The GST/HST new housing rebate is available to Canadians who purchased a new primary place of residence, including housing on leased land or shares in a cooperative housing complex. The rebate also applies to those who constructed or renovated a property for use as a primary place of residence. There are also some cases in which buyers of mobile and floating homes may be eligible for the rebate.
Eligible Canadians can apply for the GST/HST new housing rebate in order to recover a portion of the GST or the federal part of the HST paid. Supporting documentation, such as invoices, may be required in combination with a GST/HST new housing rebate application.
Take a look at these other provincial and federal government credits and deductions geared at supporting Canadian homeowners in their real estate journeys.
3. Home Buyers’ Plan
The Home Buyers’ Plan allows for applicants to withdraw funds from a Registered Retirement Savings Plans (RRSP) to help with the purchase or construction of a home for themselves or for a related person with a disability. Qualifying homes include:
single-family and detached homes;
townhomes;
mobile homes;
condos;
apartments in duplexes, triplexes and fourplexes; and
apartment buildings.
The withdrawal limit is set at $35,000 and withdrawn funds must be paid back within a 15-year period under the program. The withdrawing party or parties must be considered a first-time home buyer, must occupy the home as a principal residence within one year after buying or building it, and must be the owners of the RRSP account or accounts.
4. Multigenerational Home Renovation Tax Credit
The Multigenerational Home Renovation Tax Credit is available for families interested in constructing a secondary unit on their primary property. Under the credit, eligible homeowners can claim 15% on certain renovation expenses up to $50,000, for a maximum claim of $7,500.
However, there are some caveats. The secondary residence must be intended for seniors over the age of 65 or adults over the age of 18 who are eligible for the Disability Tax Credit. The unit must be a self-contained dwelling unit with a private entrance, kitchen, bathroom facilities, and sleeping area, and in most cases, the unit must be inhabited within 12 months after the renovation is completed. The credit can be claimed on your T1 income tax and benefit return for the renovation period taxation year.
5. Home Accessibility Tax Credit
The Home Accessibility Tax Credit is a non-refundable tax credit to help with the financial investment required to renovate or alternate a dwelling for an eligible individual to make it more accessible. Eligible individuals include those claiming the Disability Tax Credit and those who are 65 years of age or older at the end of a tax year. Those considered eligible can claim up to $10,000 in expenses. The credit can also be claimed by a person supporting an eligible individual, and in order to qualify, buyers must simply fill out their annual tax return.
Provincial tax credits available to Canadian homeowners
In addition to the federal tax credits available to homeowners mentioned above, certain provinces also offer their own tax credits. These range from school tax credits to green energy renovation tax credits. Not all provinces offer additional credits, but below you’ll find links to applicable pages on the Canada Revenue Agency website for Ontario.
Ontario
Northern Ontario energy credit
Ontario energy and property tax credit
Ontario senior homeowners’ property tax grant
Ontario seniors’ home safety tax credit
Potential first-time home buyers also have access to the First Home Savings Account (FHSA), a type of investment savings account designed to make homeownership more accessible. You can put up to $8,000 a year into this account—up to a maximum of $40,000 during its maximum span of 15 years. Unlike your TFSA, unused contribution amounts for your FHSA cannot be carried over. However, you’re not obligated to repay the amount you’ve withdrawn.
Homeowners have access to a number of tax credits and grants, whether provincially or federally, to help with the costs associated with owning a property. Speak with a financial advisor or tax professional to fully understand what you’re eligible for and how to apply.
