If you're a homeowner here in Calgary you may not know what types of tax deductions are available. On a federal level, there are quite a few deductions that you can take advantage of when it comes to tax time. Here are some of the tax benefits that you may qualify for as a new or existing homeowner:
As A First Time Buyer
If you're buying a home for the first time there is a tax credit available up to a $750 maximum. It is based on a $5000 percentage so make sure that you claim it the next time you do your taxes.
Work From Home Benefits
More and more people are putting in a home office and working in the convenience of their condo, townhouse or home. If you work either part-time or full-time out of the house you can claim part of your utility bills, home insurance, phone bills and other many other things as expenses. Not only can a home office be useful but it can be quite profitable as well!
Rental Unit Expenses
Some of the expenses that you'll be able to claim as a landlord include insurance costs and money paid for advertising. As well, you can claim the interest that you have to pay for money borrowed that is used to improve the building.
Withdraw From Your RRSP
If you're planning to buy a new home you can withdraw a maximum of $25,000 from your Registered Retirement Savings Plan to put towards the home. This money may also be used to help fund a new home's construction. You will be given 15 years to pay it back into your RRSP fund without having to pay a penalty.
Rebate For New Housing
When you buy a new home costing $450,000 or less you might be able to make a claim for the HST or GST with the new rebate for housing. This may also apply if you have renovated your principal residence extensively.
Renovating Due To Medical Issues
If you have to do renovations to your home on account of mobility problems, they can usually be claimed as an expense that was required to provide more accessibility to the home.
First-Time Home Buyers Tax Credit (HBTC)
The First-Time Home Buyers Tax Credit (HBTC) is one of the measures provided by the federal government in 2009 to encourage investment in Canadian housing.
For 2009 and subsequent years, the HBTC is a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., generally means that the closing is after this date).
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit was $750. Each year, the credit is recalculated, so it may be higher or lower than previous years.
How Do You Qualify For The Tax Credit
You, and anyone you purchase the home with, must be considered a first time home buyer to be eligible for the tax credit. The home must be used as your principal residence, and if you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it). However, the combined total cannot exceed $750.
If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first time home buyer. See the Government of Canada website for further details.
What Is A Qualifying Home
To qualify for the First-Time Home Buyers Tax Credit, a home must be a housing unit located in Canada, including mobile homes, condominiums and apartments. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.
First Time Home Buyers Tax Credit
First-time homebuyers purchasing a home may claim the HBTC on their income tax returns. Starting with the 2009 taxation year, line 369 is incorporated into the Schedule 1, Federal Tax to allow you to claim the credit in the year in which you acquired the qualifying home.
The home must be registered in your or your spouse's or common-law partner's name in accordance with the applicable land registration system.
Claimants should ensure that documentation supporting the purchase transaction is available if requested by the Canada Revenue Agency. Claimants are also responsible for making sure that all applicable eligibility conditions are met.
Keep the HBTC in mind when you consider buying a Canadian home. It's just another great reason to take the final step of real estate home ownership.
These are some of the federal tax advantages you can use to see some relief on your tax bill. There are also provincial tax benefits that will differ from one province to the next. Make sure that you let your accountant know about your house purchase or any renovations you may have made to it during the year. You may just be surprised and save some extra money on your taxes next year!