Owning a home in Canada isn;t cheap, but luckily, plenty of tax incentives can help you minimize housing costs and maximize your savings.
Affordable housing is hard to come by nowadays, so much so that some Canadians are back to living with roommates well into their 40s.
The cost of living is at the forefront of most Canadians’ minds right now. While interest rates are expected to continue to dip this year, there are still a lot of expenses homeowners are likely juggling alongside housing costs.
The Canada Revenue Agency (CRA) has shared a list of tax credits and benefits Canadians should know about.
“Filing your income tax and benefit return is the first step to accessing any benefit or credit payments, or deductions you may be eligible for,” reads a news release.
Whether you’re a homeowner, are saving for your first home or just bought your first home, here are some tax incentives to keep in mind that could put money in your pocket.
If you’re saving for your first home
Home buyers’ plan
Under the enhanced HPB, Canadians could withdraw up to $60,000 tax-free from their RRSP to buy or build a qualifying home, according to the CRA.
Canadians who withdraw between January 1, 2022, and December 31, 2025 will benefit from an additional three years to the grace period. This means the repayment period would start the fifth year following the year in which the first withdrawal was made.
Both you and your spouse/common law partner can participate in the HBP for the same qualifying home.
First home savings account
The FHSA helps Canadians save for their first home tax-free. You can contribute or transfer from your RRSPs to your FHSAs, up to $8,000 a year, with a lifetime limit of $40,000.
Contributions made to your FHSAs, including unused FHSA contributions from 2023, may be deductible on your 2024 tax return. Canadians who opened their first FHSA in 2024 can claim up to $8,000 in FHSA contributions made by December 31, 2024.
If you bought a home in 2024
Home buyers’ amount
Canadians eligible for the home buyer’s amount could claim up to $10,000 for a tax credit of up to $1,500, according to the CRA. This amount can be split with a spouse or common-law partner, but the total cannot be more than $10,000.
You’re eligible to claim the home buyer’s amount if:
- You (or your spouse/common-law partner) bought your first qualifying home in 2024, and you (or your spouse/common-law partner) did not own another home inside or outside Canada in 2024, or any of the four previous years
- You are eligible for the disability tax credit (DTC), or you acquired a home for a related person who is eligible for the DTC
Home buyers’ tax credit for people with disabilities
If you, your spouse or common-law partner is a person with disabilities, you might be able to take advantage of the HBTC, even if you aren’t a first-time home buyer. You can check if you qualify online.
Tax deductions from moving for work
If you got a new job last year and had to move at least 40 km closer to your new workplace, you can deduct all your moving costs.
Yes, that means you can claim the costs of flights, movers, selling real estate, getting out of a lease or mortgage and temporary housing — which can add up to a lot.
Self-employment or work-from-home tax credits
If you have your own business and you work from home, you can claim business-use-of-home expenses. You can also claim car travel expenses — just make sure you keep this info on record.
If you’re not self-employed, but you work from home for your job, you can still claim those expenses. Last year, eligible employees got up to $500 back if they worked from home for a maximum of 250 days.
If you upgraded your home in 2024
Multigenerational Home Renovation Tax Credit
The MHRTC could provide a valuable refundable credit for eligible expenses related to qualifying renovations to create a self-contained secondary unit for someone to reside with their family.
For example, if you want to build a self-contained basement unit for your parents to live in your home, this tax credit could help you.
You could claim up to a maximum $50,000 in expenditures for each qualifying renovation that is completed. The tax credit is 15 per cent of your costs, up to a maximum of $7,500, for each eligible claim.
Home Accessibility Tax Credit
The HATC non-refundable tax credit is for eligible home renovation or alteration expenses, with an annual expense limit of $20,000.
New GST/HST housing rebate
According to the CRA, you could be eligible to claim a rebate of some of the GST/HST paid if any of the following applies:
- You bought a newly built or substantially renovated home from a builder for use as your (or your relation’s) primary place of residence
- You bought shares in a cooperative housing corporation for the purpose of using a unit in a new or substantially renovated cooperative housing complex as your (or your relation’s) primary place of residence
- You, or someone you hired, constructed or substantially renovated your home, for use as your (or your relation’s) primary place of residence
If you sold your home in 2024
Principal residence exemption
You could be eligible to claim this if you sold your principal residence. This can eliminate, or reduce the tax on the capital gain from the sale, according to the CRA.
You’ll have to report the disposition and designate the property as your principal residence on your tax return to take advantage of the exemption.
Residential property flipping rule
If you sell a property you owned for less than 365 days and you do not qualify for a life event exception, as listed on the disposing of your principal residence page, any profit from the sale will be taxed as ordinary business income instead of capital gains.
Other tax measures
Purpose-built rental housing
If you own or invest in purpose-built rental housing, there are potential tax incentives available to help offset costs associated with creating rental units.
The PBRH rebate is an enhancement of the GST/HST new residential rental property rebate. It supports the construction of new apartment buildings, student housing, and seniors’ residences designed for long-term residential rental.
The CRA says this encourages the development of long-term rental housing in Canada.
