Keeping a roof over your head is probably your biggest expense, so your home shouldn’t be overlooked at tax time.
There are a number of tax credits for first-time buyers, Canadians with disabilities, as well as seniors. If you’re selling your home, it will be part of your return this year no matter what.
Meridian Credit Unions’s Doug Carroll has a list the top five tax implications homeowners need to know.
1) Homebuyers’ credit:
If you’re buying your first home, you may qualify for a $750 tax credit in the year it was bought.
“You are ‘first-time’ if you didn’t live in a home owned by you or your spouse in any of the four preceding years,” Carroll told Yahoo Finance Canada.
“If you claim the disability tax credit, you do not have to be first-time.”
2) RRSP homebuyers’s plan (HBP):
“The HBP allows you to withdraw up to $25,000 from your RRSP to buy or build a home for yourself or a related person with a disability,” said Carroll.
“You have 15 years to pay it back into your RRSP. As with the homebuyers’ credit, you must be a first-time purchaser, but not if you claim the disability tax credit.”
As part of changes announced in the latest federal budget, the limit goes up to $35,000 on withdrawals after March 19, 2019.
3) GST/HST new home rebate:
You could qualify to get a portion back, if you bought a new home from a builder or made substantial renovations to your property.
4) Home accessibility credit:
“For someone 65 years of age or over who is eligible for the disability tax credit, this tax credit is worth as much as $1,500 based on spending up to $10,000 of annual expenses required to make a dwelling more accessible,” said Caroll.
The senior homeowner would claim it but in some cases, the eligible caregiver can claim it instead.
5) Principal residence exemption:
If you sell an investment property you’ll have to declare it and pay the capital gains tax. While there is no tax to be paid when you sell your principal residence, you still need to report the sale. Delays in reporting could result in penalties.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains