It can be overwhelming to navigate through some of the tax credits available to Ontario homeowners. Below is a list of the most common and accessible credits and rebates offered through the federal government as well as the province of Ontario.
First-time home buyer’s credit: You can claim up to $5,000 (which earns you a $750 tax rebate) for the purchase of a qualifying home in the year if both of the following apply:
- you (or your spouse or common-law partner) acquired a qualifying home
- you did not live in another home owned by you (or your spouse or common-law partner) in the year of acquisition or in any of the four preceding years (first-time home buyer)
GST/HST new housing rebate: If you paid GST/HST for a house you built or substantially renovated you might be able to recover some of the GST or the federal part of the HST paid, providing the home is your primary place of residence. Substantially renovated means at least 90% of the interior of the existing house must be removed or replaced or a full second story added to an existing bungalow. Adding a sun porch, sun room, family room, or bedroom by itself is not a major addition.
Home buyers’ tax credit for people with disabilities: If either you or your spouse or common-law partner meets the CRA eligibility requirements for a person with disabilities (impairment in physical or mental functions that is severe and prolonged), you may be able to claim the Home Buyers’ Tax Credit even if you aren’t a first-time home buyer. A list of the eligibility criteria can be found on this page.
Home accessibility tax credit: If you meet one of the following three criteria, the Home Accessibility Tax Credit (HATC) could help you save taxes on an eligible renovation costing up to $10,000:
- You’re homeowner and you qualify for the disability tax credit
- You’re eligible to make a claim for a qualifying individual
- You’re over 65 years old
The renovations have to be permanent, make the home more accessible or reduce the potential harm to the qualifying individual, and be completed by qualified professional tradespeople.
Medical expenses tax credit: The medical expenses tax credit allows you to claim up to a certain amount in order to make your home accessible for yourself or qualified dependents who have issues with mobility. If you qualify, your tax credit refund could be as much as 25 percent of eligible medical expenses up to a predetermined amount set for the year.
Rental income deductions: If you are collecting and reporting income property rent, you can claim allowable expenses such as advertising fees, property taxes, insurance, and interest on money you borrowed to purchase or renovate the rental property.
Homeowner tax credits when working from home: For tax year 2021, the CRA has increased the claim amount for the work-from-home tax credit to a $500 flat rate, which allows Canadians working from home due to COVID-19 to deduct home office expenses on their taxes. This amount is a tax deduction and not a credit, which means you deduct it from your income to reduce your tax liability but will not result in a refund.
Seniors’ home safety tax credit: The Seniors’ Home Safety Tax Credit is a temporary, refundable personal income tax credit that can help you make your home safer and more accessible, helping you stay in your home longer. The credit is available for the 2021 and 2022 tax years and is worth 25% of up to $10,000 in eligible expenses per year for a senior’s principal residence in Ontario. Expenses must be paid or payable in 2021 and 2022. The maximum credit is $2,500 per year. Check eligibility and applicable expenses on this page.
Ontario Energy and Property Tax Credit: This credit is a tax-free payment to help you with your property taxes and sales tax on energy costs. To qualify, you must be a resident of Ontario on December 31, 2021, and at least one of the following at some time before June 1, 2023:
- 18 years of age or older
- currently or previously married or in a common-law relationship
- a parent who lives or previously lived with your child
and, in 2021, you:
- rented or paid property tax for your main residence
- lived in a public long-term care home (e.g., a seniors’ home) and paid an amount for your accommodation
You could get a maximum credit amount of:
- $1,121 if you are between 18 and 64 years old
- $1,277 if you are over 65 years old
- $249 if you live in a public long-term care home
And while not directly related to homeowners, I wanted to make sure you knew about the Ontario Staycation Tax Credit. The temporary credit for 2022 aims to encourage Ontario families to explore the province, while helping the tourism and hospitality sectors recover from the financial impacts of the COVID-19 pandemic. Ontario residents can claim 20% of their eligible 2022 accommodation expenses, for example, for a stay at a hotel, cottage or campground, when filing their personal Income Tax and Benefit Return for 2022. You can claim eligible expenses of up to $1,000 as an individual or $2,000 if you have a spouse, common-law partner or eligible children, to get back up to $200 as an individual or $400 as a family. So get out there and check out some of the gorgeousness of this province.
I hope this information was valuable for you and your family. As always, I am available for any questions you may have as well as referrals to any professionals you may need to hire.