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Tax Credits For Homeowners & First-time Buyers

Tax Credits For Homeowners & First-time Buyers

For most Canadians, it’s time to file their taxes. As a Toronto real estate agent, I thought it would be useful to provide our readers with the tax credits available to homeowners and first-time buyers. Some of these deductions can have a significant impact on your return. Let’s get to it!

GST/HST New Housing Rebate:

The GST/HST Housing Rebate gives you the opportunity to claim a portion of the GST or HST paid on a new home purchase or big-scale renovations. New build buyers, developers, or individuals who have taken on significant renovations on their primary residence are eligible. To claim your tax rebate, you must submit within 2 years of the purchase or the completion of renos.

First-Time Home Buyer’s Tax Credit (HBTC):

The First-Time Home Buyer’s Tax Credit (not to be confused with the Land Transfer Tax Refunds for First-Time Homebuyers) is a non-refundable tax credit that provides up to $10,000 in tax relief for eligible first-time buyers. Individuals or First-time homebuyers who have not owned a home in the 4 years prior. This includes spouses or common-law partners. The purchase must be the primary residence of the buyer(s). To claim this on your taxes, you will fill out line 31270 on your tax return. It is advised to discuss this with a professional when filing!

Home Accessibility Tax Credit HATC):

The Home Accessibility Tax Credit offers a 15% non-refundable tax credit on accessibility-related home renovations. This tax credit provides up to $1,500 in tax breaks per year. Seniors or individuals with disabilities who take on accessibility-related renovations are eligible for this tax break. These expenses should be claimed in the tax year in which the renovations took place.

Multigenerational Home Renovation Tax Credit:

The Multigenerational Home Renovation Tax Credit offers tax breaks up to $7,500. This claim is intended for individuals who have undergone home renovations to accommodate elder family members or adults with disabilities. Homeowners who have taken on renovations to create a dwelling for seniors or adults with disabilities are eligible for this tax credit.

Rental Income Deductions:

If you are a landlord and have expenses associated with generating rental income, you are eligible to deduct some of these expenses. Landlords of residential or commercial properties are eligible to claim these expenses. Qualifying expenses include but are not limited to repairs, maintenance, property taxes, advertising, insurance, utilities, motor vehicle expenses, and more. For more information on what qualifies, speak to a professional! Expenses should be claimed on the tax year that the expenses occurred.

Notice on Canada’s Underused Housing Tax (UHT):

Since 2022, Canada’s Underused Housing Tax imposes a 1% tax on underutilized properties owned by foreigners. However, it also affects those with rental units or properties held in partnerships or bare trust agreements for tax filing purposes to claim exemptions. It’s highly recommended for anyone affected by this tax to seek advice from a tax professional to ensure compliance and prevent penalties.

If you have any questions regarding the above when filing your taxes, our team of Toronto Real Estate Agents suggests you reach out to a professional to guide you. Hopefully you found this blog useful and get a kick back where due!


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