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Are You Missing Out on Homeowner Tax Breaks in Canada?

Josh Kepkay
Jan 30 5 minutes read

Are you a property owner looking for ways to reduce your annual tax burden? These homeowner tax incentives can help lower your taxable income and result in huge savings when filing. In this article, we’ll discuss the most common homeowner tax incentives that could benefit you this year.

Homeowner tax breaks that will save you money

GST/HST new housing rebate

If you’re someone who purchased a home that was newly or substantially renovated by a builder, or if you constructed or substantially renovated your own home, you may be eligible for a rebate for some of the GST or HST that you paid. Does this sound like you? Consult the eligibility requirements to see if you qualify.

Home accessibility expenses

Eligible individuals can claim up to $10,000 for certain home renovation expenses. The Home Accessibility Tax Credit (HATC) is a credit for home renovation expenses that help make a home safer or more accessible for qualifying individuals, including those over 65 and persons with disabilities of any age. Also, if you or your spouse meet the CRA’s requirements for a person with disabilities, you may be able to claim the HBTC, even if it is not your first time buying a home.

Work-from-home credits

If you’re a homeowner who works from home, whether you’re self-employed, a commissioned employee, or a professional, there are several expenses you can deduct. Expenses you can claim include utility bills, internet bills, office supplies, and more. As more people make the permanent shift to working from home, these deductions are bound to come in handy.

Some moving expenses

If you’ve moved to start a new job or full-time post-secondary degree in the past year, you can claim eligible moving expenses. To qualify, your new home has to be at least 40 kilometres closer to your new school or workplace. This is a great way to help offset some moving costs, like movers, storage, vehicle expenses, and temporary living expenses, to name a few.

First-Time Home Buyers’ Tax Credit

If you (or your spouse or common-law partner) just bought your first home, you may qualify for the First-Time Home Buyers’ Tax Credit (HBTC). You can claim up to $5,000 for the purchase of a “qualifying home”, including single-family houses, townhouses, condo units, and more. Being a new homeowner comes with a lot of expenses, so any savings are worth claiming.

What you need to know about rental property deductions

People who purchase and operate rental properties can take advantage of various tax deductions that differ from those available for a primary residence owned by the homeowner. You can claim allowable expenses, such as advertising, insurance, utilities, travel, and minor repairs.

There are two basic types of allowable expenses – current expenses and capital expenses. A current expense is something that restores a property to its original condition, for example, painting the exterior of a wooden house. A capital expense is something that significantly improves or extends the life of a property, such as putting vinyl siding on a wooden house. As a rental property owner, you need to understand the difference between the two expense types because they are calculated differently on your tax return.

Some common allowable expenses include:

Repairs and maintenance

You can deduct expenses for minor repairs, such as fixing a broken window or painting a house. Deductible expenses include the cost of labour and materials. However, it’s important to note that you cannot deduct the value of your own labour.

Professional, management, and administrative fees

If you hire other people or agencies to help run your property, there are several expenses you may be able to claim. These expenses include fees for legal services to prepare leases or collect overdue rent, fees for bookkeeping services, amounts paid to property managers or management companies, and amounts paid to rental agents.

Why claim these tax breaks?

For homeowners, tax deductions can amount to thousands of dollars. It’s worth taking the time to look into your options and make sure that you aren’t missing out on any savings.

Looking for more tips?

If you're uncertain of the steps to take or need advice tailored to your situation, our team is here for you. Our real estate agents are knowledgeable about the intricacies of our current market and can answer any questions you have.

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