Tax benefits for homeowners

While tax season can be a stressful time for most Canadians, it also gives homeowners a little something extra to smile about. The Canada Revenue Agency has a number of programs geared toward helping homeowners, and by taking advantage of these services, Canadians can ensure that purchasing a property results in added savings. After all, once a homeowner braves the world of home loans and mortgage rates, it’s nice to receive a break on their investment.

First-Time Homebuyers’ Tax Credit
As its name implies, the First-Time Homebuyers’ Tax Credit helps first-time buyers pay for the expenses incurred while purchasing a property. Taxpayers can claim $5,000 on a home purchase as long as it’s a qualifying home and they did not live in another home during the year of purchase, as well as the four preceding years. In addition to first-time home buyers, this tax credit is also available to persons with disabilities.

Medical Expense Tax Credit
The medical expenses that can be claimed by Canadian taxpayers, and include renovations or alterations done on a property to improve access for disabled persons. All expenses paid in any 12-month period ending in 2012 are eligible, as long as they were not claimed in 2011. Amounts paid outside of Canada are eligible as well.

Rental tax credit
Canadian homeowners who receive income from renting out their properties can also take advantage of special tax breaks. In addition to these deductions, rental property owners may be eligible for the GST/HST NRRP rebate. This rebate applies to both rental properties and land leased for rental purposes. Qualifications include a newly purchased or built residential rental property, substantial renovations on the property, additions to multiple-unit rental complexes, converting a commercial property into a residential property and land leased for residential purposes.

Working at home tax credit
There are a number of ways for homeowners to deduct expenses incurred from working at home, whether they are self-employed or salaried employees. Costs such as heat, home insurance, electricity, cleaning materials, property taxes, mortgage interest and CCA can all be claimed if part of your home also acts as your office.

Selling your home tax credit
Tax benefits exist even for homeowners who are selling their properties. Taxpayers may be able to claim deductions relating to profit from the sale of their home. Meanwhile, if a homeowner is forced to move for work or educational purposes, they may be eligible for tax breaks regarding moving expenses. In order to qualify, the taxpayer’s new residence must be at least 40 kilometers closer to their place of employment or educational institution.

 

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