Property Tax Deductions Available for Canadian Homeowners

7 March 2018
by SeaFirst

Tax Breaks for Canadian Homeowners

Tax season is here. Unfortunately, every year many homeowners in British Columbia submit their returns, completely unaware of additional property tax deductions they may qualify for. Whether you are a first time home buyer, work from home, or have recently made renovations, it’s worth looking into the various rebates and claimable expenses when putting together your tax return.  

First-Time Home Buyers

First-time purchasers, or purchasers who haven’t owned a home in 4 years will want to take advantage of the First-Time Home Buyer’s Tax credit.  With the ability to claim up to $5000 on the purchase of a qualifying residence, buyers can receive up to $750 in non-refundable tax credits for their new home.

First Time Home Buyers Tax Credit

Moving

If you relocated for work or school in the previous tax year, you may be able to claim a portion of your moving expenses on your taxes.  To qualify, workers must have moved within 40km of a new place of employment while students must be enrolled full-time at a post-secondary institution and live within 40 km of their school.

Renovations

BC Provides a Home Renovations Tax Credit for individuals 65 and older and people with disabilities.  Under this tax credit, renovations or alterations made to improve accessibility and safety can be claimed up to a limit of $10,000.

To qualify, all renovations must have been made to the homeowner’s principle residence. Qualifying updates can include widening doorways to improve passage, the addition of wheelchair ramps and lifts, and relocating switches for easy access.

GST/HST Tax credit homeowners canada

GST/HST New Housing Rebate

Canadians who have purchased, built or made substantial updates to their residence may be eligible for a GST/HST rebate on any taxes paid. Qualifying homes include new builds (purchased from a builder) for under $450,000, owner-built homes, and residences that have made major additions or renovations. 

Energy Rebates

There are a number of rebates available for British Columbians looking to improve the energy efficiency of their homes.  Updates include adding insulation, draftproofing and the installation of a natural gas water heater. For a full list of rebates, visit BC Hydro’s website

Rental Income:

Do you rent out a portion of your primary residence? When reporting their rental income, homeowners can claim certain expenses towards purchasing, improving and advertising their suite.  This includes deducting a portion of large annual payments including mortgage interest, property taxes and even home insurance.  As a general rule of thumb, the amount of money a homeowner can claim is based on the percentage of the square footage of their suite versus the rest of the residence.

For more information on which deductions are available visit the CRA website.

When adding a rental suite, it’s always important to inform your insurance company of the update. In addition, most homeowner’s insurance policies don’t provide additional coverage or liability for damages from renting. Learn more about how to properly insure your rental suite here.

income tax deductions for working from home

Working from Home

Certain home expenses can be deducted for people who work from home. This includes employed individuals who use a designated office space inside their primary residence, or self-employed workers who use their home as their principal place of business.

Deductible expenses are typically calculated as the percentage of square footage used for work and can include the cost of electricity, property taxes, security and maintenance. In addition, self-employed individuals can also deduct mortgage interest on their taxes.

It should be noted that if you are using your residence for business, it should be mentioned to your home insurance provider.  Typical insurance policies include limits on business items, and your property may not be fully covered in the event of a loss.

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