As tax season comes closer, don’t miss out on housing-related tax benefits that could save you money! The Canada Revenue Agency (CRA) has several programs designed for homeowners, first-time buyers, or those saving for a home. Here’s a simplified guide:
Saving for Your First Home
Home Buyers’ Plan (HBP): This allows you to withdraw up to $60,000 tax-free from your Registered Retirement Savings Plan (RRSP) for purchasing or building your first home. Notable features include:
- Extra Time for Repayment: Withdrawals made between January 1, 2022, and December 31, 2025, get an additional three years before repayment begins—starting in the fifth year after your first withdrawal.
- Couples Can Benefit: If you’re married or have a common-law partner, both individuals can each withdraw for the same home purchase.
First Home Savings Account (FHSA): A great way for first-time buyers to save tax-free. Key details include:
- Tax-Free Saving Limits: Contribute up to $8,000 per year, with a lifetime maximum of $40,000.
- Tax Deductibility: Contributions made within a year (including unused FHSA room) may be deductible on your tax return the following year.
- Carry-Forward Contribution Room: Missed contributions can be saved and used in future years.
Dual Benefits: You can combine the benefits of the HBP and the FHSA when you meet conditions for both programs.
Tax Support for Purchasing a Home
Home Buyers’ Amount: If you’re buying your first home, you could claim a $10,000 tax credit, which could result in up to $1,500 in tax savings. Some eligibility conditions:
- This must be your first home, or it’s for someone eligible for the Disability Tax Credit (DTC).
- Neither you nor your partner should have owned another home for at least the five years prior.
Tax Benefits for Renovating or Upgrading Your Home
Home Accessibility Tax Credit (HATC): If you’re over 65 or eligible for the DTC, you can claim up to $20,000 in renovation costs for a tax credit of up to $3,000. It must go toward:
- Improving access to the home.
- Reducing risk inside the property.
Multigenerational Home Renovation Tax Credit (MHRTC): Families creating a self-contained living space for seniors or adults with a disability may claim 15% of renovation costs (up to $7,500 in credit per project on a maximum spend of $50,000).
GST/HST New Housing Rebate: Whether you’ve purchased, renovated, or even built your own home, you may qualify for a rebate on GST/HST paid. A few qualifying scenarios:
- You bought a newly built or significantly renovated home as your primary residence.
- You did substantial renovations to your existing home.
- You purchased a mobile or modular home (or floating home).
- You bought shares in a cooperative housing corporation for primary residence purposes.
- You leased a new home as a primary residence for someone else.
The Importance of Filing Your Tax Return
To unlock these benefits, make sure you file your tax return properly. Be ready to provide all required documentation to back up your claims. Need help? Contact a tax professional or consult the CRA’s resources for clarity and assistance.
For additional details, visit the CRA’s webpage on these housing tax programs. The rules and thresholds mentioned here are valid as of January 10, 2025, but could be subject to change.
When it comes to taxes, they are always changing, always being updated! That is why it is always recommended to use a professional like JHG Corporate and Tax Services Inc to get your taxes done and ensure you are getting the most out of your tax return! Click here to book an appointment with a real tax pro today, or call us at 778-691-6677!
Tags:
- housing tax benefits
- first-time home buyer tax incentives
- Canada Revenue Agency programs
- HBP tax program
- FHSA savings plan
- housing tax deductions
- CRA Home Buyers’ Plan
- tax rebates for renovations
- Home Buyers’ Amount Canada
- multigenerational home tax credit
- GST/HST new home rebate
- RRSP withdrawal for home buying
- seniors tax credits
- disability home tax benefits
- Canada tax season tips
- file tax return housing credit
- Renovation tax savings
- Tax professional services
- tax incentives for new homeowners Canada
- tax credit for elderly homeowners
- real tax pros Canada
- how to claim home renovation rebate
- first home tax credit guide
- housing tax tips for Canadians
- CRA programs for home upgrades