Your tax guide to navigating homeowner and first-time buyer deductions this season

As the April tax deadline nears, knowing about the various tax credits available can make a big difference for homeowners and first-time buyers. Whether you’re buying your first home or you’re an experienced homeowner, understanding these deductions and programs can greatly impact your tax returns and help you maximize your refund this season.

GST/HST New Housing Rebate

  • What it is: Recoup a portion of the GST or the federal part of the HST paid for new or renovated homes.
  • Eligibility: Buyers of new homes, constructors of homes, or individuals who have majorly renovated their primary residence.
  • Qualifying homes: New or substantially renovated primary residences.
  • Claim process: Submit your claim within two years after the purchase or completion of renovations.

First-Time Home Buyers’ Tax Credit (HBTC)

  • What it is: A $10,000 non-refundable tax credit for eligible first-time home buyers, offering up to $1,500 in tax relief.
  • Eligibility: First-time homebuyers or those who haven’t owned a home in the previous four years, including the buyer’s spouse or common-law partner.
  • Qualifying homes: Primary residences in Canada.
  • Claim process: Claimed in the tax year when the home is purchased, on line 31270 of your tax return.

Home Accessibility Tax Credit (HATC)

  • What it is: Offers a 15% non-refundable tax credit on up to $10,000 of eligible home renovation expenses, for a maximum of $1,500 in tax relief per year.
  • Eligibility: Homeowners making accessibility-related renovations to accommodate seniors or individuals with disabilities.
  • Qualifying renovations: Changes made to improve accessibility or help a senior or a person with a disability be more functional or mobile at home.
  • Claim process: Claimed in the tax year when the expenses were incurred.

Multigenerational Home Renovation Tax Credit

  • What it is: Provides up to $7,500 in tax relief for eligible renovations to accommodate a senior family member or an adult with a disability.
  • Eligibility: Homeowners undertaking renovations to create a secondary dwelling for a senior or a person with a disability.
  • Qualifying renovations: Renovations that enable the senior or adult with a disability to live with a relative in a secondary dwelling.
  • Claim process: Available for expenses incurred after the tax year it was introduced.

Rental Income Deductions

  • What it is: Allows landlords to deduct expenses related to generating rental income, including mortgage interest and property taxes.
  • Eligibility: Property owners who earn rental income from residential or commercial properties.
  • Qualifying expenses: Mortgage interest, property taxes, maintenance costs, utilities, and insurance.
  • Claim process: Expenses are deducted in the tax year they are incurred.

This list is not exhaustive, and specific provinces may offer additional deductions and credits not covered here.

Notice on Canada’s Underused Housing Tax (UHT) Since 2022, Canada’s UHT imposes a 1% tax on underused foreign-owned properties. This tax also has implications for those with rental units, or with properties held in partnerships or bare trust agreements, in order to claim exemptions. It’s advised to consult a tax professional if you are impacted by this tax to ensure adherence and avoid penalties.