Tax season is officially upon us, but did you know that there are a number of ways you can maximize your tax return by leveraging your home? Before you file your taxes this year take a look at these seven money saving tips that can make your bank account look a little bit brighter this spring.
1. First-time Home Buyer’s Tax Credit
If you, your spouse, or common-law partner have purchased a qualifying home in 2015, than you are eligible to claim a non-refundable tax credit on a percentage of $5,000. This maximum amount of $5,000 can be split between two individuals as long as neither of the parties involved lived in a home that they owned within four years prior to when the new home was acquired. This tax credit is also eligible for individuals with disabilities. If a home was purchased to allow the person with the disability more accessibility or to have a space that is better suited for their needs, then a claim can be made. This tax credit could save you up to $750! Learn more here.
2. Home Buyer’s Plan
First-time home buyers can also take advantage of the Home Buyer’s Plan which allows individuals to withdraw up to $25,000 from their registered retirement savings plan (RRSP) to assist with the purchase or construction of a home. Of course, conditions do apply, including having a written agreement to buy or build the qualifying home that you intend to purchase. Click here for all the details on how to take advantage of this plan.
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3. GST Tax Rebate
Some of the GST you paid on that new house you purchased in 2015 can be recovered if your new home is your primary residence and if it’s less than $450,000. Other home tax deductions exist for homes that are built by the owner, as well as for residential rental properties. Find out which rebate you may qualify for here.
4. Medical Expenses Tax Credit
A claim can be filed to account for home renovation expenses that have been made for a person with mobility impairments, just as long as the renovations created a user-friendly environment. Check here to see if you are eligible to claim any home improvements as medical expenses on your tax return.
5. Rental Income
Owning a rental property can have some hidden tax breaks that you might not know about. By using the T776 tax form to report your rental income, you can claim expenses such as insurance, advertising, and interest on the money you borrowed to buy or make improvements to the rental property.
6.Working From Home
Working from home has more benefits than simply the ability to abandon dress codes. There are a numerous expenses that can be deducted if you are self-employed, a professional working from home, or a commissioned employee. Expenses can be claimed on the T777 form and can include your home’s insurance, electricity, cleaning materials and minor repairs.
7. Selling A Home
In most cases, GST does not apply when you sell your home; however, if you built the home then a GST payment may be required. Also, capital gains must be reported if the home you have sold is not your primary residence. If you've recently moved to a new home so that you are closer to your place of work or your business, or if you've moved to take courses as a full-time student in a post-secondary program at a university, college or other educational institution, you can qualify to claim moving expenses – just as long as your new home is at least 40 kilometres closer to your place of work or school.