Shawn DeLaat
If you live in Ontario and are wondering whether buying a home has an effect on your tax return, the short answer is yes. If you buy a home in Ontario, there are many incentives like tax credits and rebates that can help lessen the impact on your tax return. We have compiled a list of some of the popular tax credits and rebates that are available to Ontario home buyers.
Tax Credits & Rebates For Homebuyers in Ontario
First Time Home Buyers’ Amount
The first-time home buyers’ amount is a tax credit available for people who have purchased their first home. Designed to help offset some of the costs associated with buying a home including inspections, lawyer fees, and more.
With this incentive, you can claim $5,000 on the purchase of a qualifying home. This works out to a maximum rebate of $750 per home (the claim can be split if there are two buyers but cannot exceed the combined amount of $750).
To qualify for this tax credit, both of the following must apply:
- You or your spouse (or common-law partner) acquired a qualifying home during the tax year in which you are filing for
- You did not live in another home owned by you or your spouse (or common-law partner) in the year of the acquisition or in any of the four preceding years
GST/HST Housing Rebate For New Homes
If you paid for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) on a newly constructed (owner or builder built) or substantially renovated home, you may qualify for the GST/HST New Housing Rebate. The amount of this rebate will vary based on the conditions and circumstances under which you qualify.
You may be eligible for this incentive if:
- You are an individual who purchased new or substantially renovated housing from a builder for use as your primary residence (or your relation’s)
- You are an individual who constructed or substantially renovated your own home or hired someone else to do so, for use as your primary residence (or your relation’s)
- You are an individual who purchased shares in a cooperative housing for the purpose of using the unit as your (or your relation’s) primary residence (in a new or substantially renovated cooperative housing complex)
- You are an individual who purchased a new or substantially renovated mobile home, modular home or floating home for use as your primary residence (or your relation’s)
Ontario Land Transfer Tax Rebate
If you are a first-time home buyer in Ontario, you may qualify for a rebate on the land transfer tax you pay at the time of purchase. The Ontario Land Transfer Tax Rebate can cover up to the full tax amount assuming the purchase price of your home is under $368,000. If your home is over this amount the maximum rebate value is $4,000.
In order to qualify for this rebate, you must meet the following requirements:
- Must be at least 18 years of age
- Must be a Canadian citizen or a permanent resident of Canada
- Purchaser must use the home as their primary residence within 9 months of purchase
- Cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time
- If the purchaser has a spouse, the spouse cannot have owned an eligible home, or has any ownership interest in an eligible home, anywhere in the world, while he or she was the purchaser’s spouse
Home Buyers Plan
The Home Buyers Plan is a program that allows first-time homebuyers to withdraw from their registered retirement savings plan (RRSPs) tax-free to purchase or construct a qualifying home. The home must be used as the buyer’s primary place of residence. As of March 19, 2019, eligible plan members are entitled to withdraw up to $35,000 from their RRSPs.
It is important to keep in mind that you must repay the withdrawn amount within 15 years. Repayments start two years after the year the money was withdrawn and can be paid by regular contributions or in full at any time.
In order to participate in the Home Buyers’ Plan you must meet the following conditions:
- You must be a first-time homebuyer
- You must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability
- Must be a resident of Canada
- Must intend to occupy the qualifying home as your primary residence within one year after purchasing or building it.
Moving Expenses
Qualifying homeowners can claim moving expenses such as transportation and storage costs, travel expenses, temporary living expenses, cost of lease cancellation, incidental costs and more.
In order to qualify for these tax deductions, you must meet the following criteria:
- You moved to work or to run a business, or you moved to study courses as a full-time student enrolled in a post-secondary program at a university, college or another educational institution
- You moved at least 40 km closer to your new work or school
Home Accessibility Tax Credit
If you have made renovations or incurred expenses in order to make your home safer and more accessible for disabled individuals or individuals over the age of 65, you may qualify for the Home Accessibility Tax Credit (HATC). This tax credit grants qualified and eligible individuals to claim up to $10,000 per year for qualifying renovations made in eligible dwellings.
Bottom Line
If you are buying a home in Ontario there are many different ways in which it can affect your tax return, especially as a first-time homebuyer. The best way to ensure that you take advantage of all the tax incentives available is to talk to a professional tax advisor. They will be able to tell you which credits you qualify for and may even be able to find additional incentives for which you qualify.
Looking To Buy A Home In The Niagara Region? Call Davids & DeLaat Today!
Are you looking to purchase a home in the Niagara Region? Whether you are a first-time homebuyer or an experienced purchaser, the team at Davids & DeLaat is here to help. We pride ourselves on our customer service and are committed to helping our clients achieve their real estate goals! Take a look at the available MLS listings in Niagara today to get started!
