4 tax incentives homeowners in Canada should take advantage of
Owning a home isn’t cheap. Fortunately, there are tax credits and benefits offered by the Government of Canada that can help you get some extra cash to maintain your dream home.
Canadians continue to grapple with a cost-of-living crisis due to soaring food prices and unaffordable housing, to name just a few reasons.
Costs are at the forefront of most people’s minds right now, especially homeowners.
While the Bank of Canada cut its key interest rate for the third time this year to 2.5 per cent, experts say it’s not enough for would-be homeowners to unpause their purchase plans, especially given broader economic uncertainty.
So, homeowners might be wondering how they can renovate existing properties to meet evolving needs.
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Here are six tax credits and benefits you should take advantage of if you own a home, according to the CRA and other financial institutions.
Multigenerational Home Renovation Tax Credit (MHRTC)
The MHRTC could provide a valuable refundable credit for eligible expenses related to qualifying renovations to create a self-contained secondary unit for someone to reside with their family.
For example, if you want to build a self-contained basement unit for your parents to live in your home, this tax credit could help you.
You could claim up to $50,000 in expenditures for each qualifying renovation that is completed. The tax credit is 15 per cent of your costs, up to a maximum of $7,500, for each eligible claim.
Home Accessibility Tax Credit (HATC)
The HATC non-refundable tax credit is for eligible home renovation or alteration expenses, with an annual expense limit of $20,000.
“This would provide a tax credit of up to $3,000 for eligible expenses to renovate or alter your home so a qualifying individual can access, or be mobile or functional within,” according to the Canada Revenue Agency.
Qualifying individuals include:
- Someone eligible for the disability tax credit (DTC) at any time in the year
- Someone who is 65 and older at the end of the year
Tax deductions for moving for work
If you got a new job last year and had to move at least 40 km closer to your new workplace, you can deduct all of your moving costs.
Yes, that means you can claim the costs of flights, movers, selling real estate, getting out of a lease or mortgage, and temporary housing, which can add up to a lot.
Self-employment or work-from-home tax credits
If you have your own business and you work from home, you can claim business-use-of-home expenses. You can also claim car travel expenses — just make sure you keep important info on record.
If you’re not self-employed but you work from home for your job, you can still claim those expenses.
This article was originally published on Oct. 29, 2024. It has since been updated.