Are You a Canadian Homeowner? Are You Looking for More Deductions?
Just this morning we talked about how it’s tax season once again here in Canada, and that means everyone’s worrying about RRSPs, and whether or not they’re actually the best place to put your money. But there’s another hot topic that always resurfaces around tax time, and that’s the issue of deductions. So what home expenses can you claim on your taxes? And are you claiming all that you can?
Yes, you’re one of the hardest hit by the mortgage rules put into place last summer; but the government’s also trying to help you out. If you purchased your first home this past tax year, you can claim a non-refundable tax credit up to a maximum amount of $750. No it might not offset that huge down payment you had to make all that much. But any little bit helps and if you can claim this credit, then you should!
The Home Buyer’s Plan
This is one of the tax rebates that just about everyone in Canada knows about. If you’re going to be purchasing a home, and it’s the first home you’ve purchased, you can withdraw $25,000 from your RRSP to help buy or build that home. You do have to repay the money, but you have 15 years to do it.
If you’ve had to install handrails, chair lifts, or construct a bedroom on the main floor for an aging individual, these are all renovations that are necessary to make to the home in order to make it livable for those within it. Not only will the government give you a credit to help pay for these renovations at the time of, but you can also claim it on your taxes.
New home rebate
This one can get a little tricky, as it involves GST and HST (taxes that not all provinces have,) and applies to some homes, but not others. If a home purchased is less than $450,000; has had extensive renovation work on it; is the principal residence for the person that paid for it; or is a specific type of rental property, you may be eligible for a tax rebate. This could get you a lot of money back, but you’ll need to speak to a tax professional.
If you rent out a second property, or part of your primary residence, you may be eligible for rebates pertaining to expenses incurred as part of owning that rental property. Things such as advertising, insurance, interest on borrowed money to make renovations, or the actual cost of renovations may all be deductible from your taxes.
If you work at home, even if you don’t have a home office per se, you can claim expenses for things that are necessary in order to allow you to work. This can include a percentage of your utility bills such as heat and cable for the Internet connection, as well as even a certain amount of square feet. Because even if you don’t have an office, you’ve gotta sit somewhere!
So many tax deductions lie all around us right within our homes, and we don’t even realize it. And while each category on their own may provide seemingly a small return, rebate, or deduction, if you hit more than one category, you could be talking a major tax return!