Tax Benefits for Homebuyers in Canada: What You Need to Know

Tax Benefits for Homebuyers in Canada: What You Need to Know

Buying a home is a major financial decision, but did you know there are tax benefits that can help you save money? Whether you’re a first-time homebuyer or investing in real estate, understanding these tax advantages can make homeownership more affordable.

1. First-Time Home Buyers’ Tax Credit (HBTC)

If you’re purchasing your first home, you may qualify for the First-Time Home Buyers’ Tax Credit (HBTC). This non-refundable credit allows you to claim $10,000, which can result in up to $1,500 in tax savings.

Who qualifies?

• You or your spouse/common-law partner must be buying a home for the first time in the past four years.

• The home must be your primary residence.

2. Home Buyers’ Plan (HBP) – RRSP Withdrawals

Under the Home Buyers’ Plan (HBP), first-time buyers can withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) tax-free to help with a home purchase. Couples can withdraw a total of $70,000!

Key Points:

• You must repay the amount withdrawn within 15 years to avoid penalties.

• Must be used for a qualifying home purchase.

3. GST/HST New Housing Rebate

If you buy a newly built home, you may qualify for a GST/HST New Housing Rebate, allowing you to recover part of the federal Goods and Services Tax (GST) or Harmonized Sales Tax (HST) paid on your home purchase.

Eligibility:

• The home must be newly constructed or substantially renovated.

• The purchase price must be $450,000 or less for full rebate eligibility.

4. Rental Property Tax Deductions

If you buy a home as an investment property, you can deduct expenses such as:

• Mortgage interest

• Property taxes

• Maintenance and repairs

• Depreciation (Capital Cost Allowance)

These deductions can reduce your taxable income, helping you keep more of your rental income.

5. Moving Expenses Deduction

If you buy a home and relocate at least 40 km closer to your workplace or school, you may be able to deduct moving expenses, including:

• Transportation and storage costs

• Temporary accommodation

• Legal fees

Final Thoughts

Owning a home in Canada comes with several tax benefits that can save you thousands of dollars. Whether you're a first-time homebuyer, real estate investor, or planning a move, taking advantage of these tax incentives can make a big difference.

📲 Need help navigating homebuyer tax benefits? Contact Tiki Tax Services today! 236-788-7799