Navigating the maze of tax filing in Canada can be a daunting task, especially for homeowners. With various credits, rebates, and plans available, it’s important to understand how to maximize your tax benefits. Whether you’re a new homeowner or have been living in your house for years, here are some essential tax tips to help you optimize your tax return.
Home Buyers Amount
If you bought a home this year, you might qualify for a tax break called the Home Buyers’ Amount. If your new home qualifies, you can claim up to $10,000 on line 31270 of your tax return. Here’s what you need to qualify:
- You or your spouse/common-law partner bought a qualifying home.
- Neither of you lived in a home you owned (or your spouse/common-law partner owned) in the year you bought your new place, or in the previous four years.
Even if you’ve owned a house before, you may still qualify if these conditions are met.
GST/HST New Housing Rebate
If you’ve bought a newly built home or done any big renovations, this rebate may help you get back some of the GST/HST you paid. Just make sure your home is your (or a family member’s) main residence. For all the details, check out the Government of Canada GST/HST New Housing Rebate webpage.
Home Buyers Plan
The HBP lets you take out up to $60,000 from your RRSP to buy or build a home without getting taxed right away. It also allows you 15 years to pay it back. This is a big help for covering down payments or other costs. To see if you qualify and learn more, visit the Government of Canada Home Buyers Plan page.
Rental Income
If you’re making rental income from property you own – like renting out a house, an apartment, or even a room– you might be eligible for the GST/HST New Residential Rental Property Rebate. This lets you get some of the GST/HST you paid back. Find more info on the Government of Canada Rental Income page.
Working From Home?
The rise of remote work has changed the tax landscape for many homeowners. If you use part of your home for work, you can claim a portion of your home expenses like utilities, insurance, property taxes, and mortgage interest. There are two ways to do this: use a simple flat rate or calculate your actual expenses. Keeping good records is a must to make sure you claim everything you’re entitled to.
Selling Your Home
When you sell your primary residence, you usually don’t have to worry about paying taxes on any profit, thanks to the Principal Residence Exemption. But if it wasn’t your main home for the entire time you owned it, you need to do a capital gains calculation. Remember to fill out Schedule 3, even if your gain is exempt.
Moving Expenses
If you moved at least 40 kilometers closer to your new place of work or school (in a post-secondary program at a university, college, or other educational institution), you can deduct moving expenses. Keep detailed receipts and records as the CRA may ask for supporting documentation. This only applies if you have income from a job or self-employment at your new location.
Please note: The information provided in this blog is for general informational purposes only and is not intended to be a substitute for professional tax advice. Always consult with a qualified tax advisor or financial professional for advice specific to your individual circumstances. Tax laws and regulations are subject to change.