By 99959
Real Estate News

In December 2022 alone, there were 21,840 real estate transactions in Canada, despite rising interest rates and a significant cooling off in the real estate market from record-shattering sales in 2021, according to the Canadian Real Estate Association.

”Knowing the ins and outs of Canada Revenue Agency’s rules around homebuyer incentives and eligible deductions can mean more money in your pocket, says Emily Verrecchia, a tax expert at TurboTax Canada.”

“As a homeowner, there are several federal and provincial tax deductions and tax credits that may be available for you to claim, depending on your situation,” she advises.

From first-time homebuyer incentives to repair and renovation rebates, it can add up.

”Several provincial governments offer land transfer tax or provincial sales tax rebates for first-time buyers. Some homebuyers may be eligible for the new GST/HST New Housing Rebate if they purchased or constructed new housing or substantially renovated housing for use as their primary residence, adds Ms. Verrecchia.”

“The easy one that every first-time homebuyer is going to qualify for is the first-time homebuyers tax credit,” says Jason Heath, a certified financial planner and managing director of Markham, Ont.-based Objective Financial Partners Inc.”

“There’s not much you need to do to qualify for that other than filing a tax return,” he says.

”That tax credit allows first-time buyers to claim a non-refundable 15 per cent credit on up to $10,000 for the purchase of a qualifying home. That amounts to a $1,500 tax savings from the federal government for someone buying their first home, Ms. Verrecchia explains.”

”The home buyers amount can be claimed by first-time home buyers who acquired a qualifying home and didn’t live in another home owned by themselves, their spouse or common-law partner in the year of purchase, or in any of the four preceding years, she adds.”

”Qualifying homes include single-family houses, townhouses, condominium units and apartments in duplexes, triplexes, fourplexes or apartment buildings.”

”There is also the Home Buyers’ Plan, Mr. Heath points out, which allows buyers to withdraw up to $35,000 tax-free from a registered retirement savings plan to use for a down payment on a home.”

”Beginning in April, the federal government is offering a tax-free First-Time Home Savings Account, he adds. That will allow prospective first-time buyers to make tax-deductible contributions (like an RRSP) and non-taxable withdrawals for a down payment (like a tax-free savings account).”

”Two-thirds of Canadians own their own homes, according to Statistics Canada’s Census data, and they spend more than $80-billion annually on home renovations.”

“Most of the rebates these days are targeted at seniors,” Mr. Heath says. “If you are making repairs or doing renovations that make your home safer – that can include things like installing grab bars, redoing washrooms to make them more accessible, renovations that make a house safer for somebody who is 65 or older – there are both federal and provincial tax credits that are available.”

”The federal Home Accessibility Tax Credit amounts to tax savings of 15 per cent on up to $20,000 in renovation costs.”

”Ms. Verrecchia shares that homeowners can look forward to a new tax credit which was just created to help families afford to renovate their space for an elder with a disability to live with them. The Multigenerational Home Renovation Tax Credit will be worth 15 per cent of expenses paid up to $50,000 for a maximum credit of $7,500 as of 2023.”

”There are also tax credits related to environment retrofits such as home insulation, windows, doors, and heat pumps, Mr. Heath points out.”

“Things like that will qualify potentially for the Canada Greener Homes Initiative,” he adds.

”Taxpayers who own cottages or rental properties aside from their principal residence may also be eligible for certain tax deductions for renovations or repairs when the work is done or when they sell the property, which can reduce the capital gains tax on the rental income, he adds.”

”There are several potential tax savings that are easy for homeowners or renters to miss out on, says. Ms. Verrecchia. Those include eligible expenses for those homeowners and renters who work from home, whether they are self-employed, a commissioned employee or a professional.”

“The amount and categories of expenses that you are permitted to claim corresponds to the percentage of the home used for work as well as whether you are an employee working from home or are completely self-employed running your own business,” she explains.

”Those expenses could include utilities such as heating, water and electricity, insurance, home maintenance costs, internet and home security.”

Source: to continuing reading the full article published on the Globe and Mail website click HERE

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