Tax Credit/Incentives in regards to Real Estate

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Canadian homeowners have several home tax deductions that they can claim but are frequently overlooked. Before you submit your tax return this year, check the following list. 

First-time home buyer’s tax credit
If you bought a home for the first time, you can claim a non-refundable tax credit of up to $750. This new non-refundable tax credit is based on a percentage of $5,000. You or your spouse or common-law partner can claim the home buyer’s tax credit.
Medical expenses tax credit
Persons with mobility impairments can claim renovation expenses to make their home more accessible under medical expenses deductions in Canada. The government provides an extensive list of eligible medical expenses as well as medical expenses that you cannot claim. 

GST/HST tax rebate (new housing rebate)
If you buy a new home as your principal residence, and if it’s less than $450,000, you may be able to claim the GST/HST new housing rebate too. Ontario and B.C. residents may also claim the provincial portion of the HST if they buy, build or do a major renovation on their principal residence. Other home tax deductions exist for homes that are built by the owner as well as for residential rental properties.
Home Buyer’s Plan
The Home Buyer’s Plan allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSP) to help with the purchase or construction of a home. Certain conditions apply. Submit a request by completing the T1036 tax form that is available.

Rental income
If you rent a property you own or that you have use of, use the T776 tax form to report the rental income and claim allowable expenses such as advertising, insurance and interest on the money you borrow to buy or improve the property. 

Work from home expenses
If you work from home, there are a number of expenses that you can deduct if you are either self-employed, a commissioned employee or a professional.  Examples of the type of expenses that you can claim include heating, home insurance, electricity and cleaning materials. 

Selling a home
Generally, the GST/HST does not apply when you sell your home, but there are cases where it does. For example, if you built the home, you may have to pay the GST/HST. If the home you sell is not your principal residence, you have to report the capital gains.  Also, there are a number of moving tax deductions available to you.

Provincial credits
Manitoba homeowners benefit from two other home tax credits: Education Property tax credit and the School Tax Credit for homeowners. In Ontario, homeowners can apply for the Ontario property tax credit and the Senior Homeowner’s Property tax credit. 

Childcare tax credit
In most cases, childcare expenses for an eligible child must be claimed by the parent with the lower net income for tax purposes.  If parents are separated and share custody, each parent may usually claim a portion of the childcare costs.  Where a medical doctor certifies in writing that the lower-income spouse is incapable of caring for the child due to physical or mental infirmity, the costs may be claimed by the higher income spouse.

Eligible childcare expenses include day-care centres and day nursery schools, some individuals providing childcare services, day camps and day sports schools, educational institutions such as private schools (the portion of tuition costs relating to childcare services), boarding schools, and overnight sports schools and camps.

For more information, please consult the CRA website