As a first time home buyer in Canada, filing your tax returns can seem intimidating – and rightfully so! Fortunately, there are several tax credits and deductions specifically designed to support you. Here are some of the top tips to help you maximize your benefits:
Keep Good Records
The first step to taking advantage of all the tax breaks available is to get organized. This means keeping track of all your expenses related to buying and owning your home, such as mortgage interest, property taxes, and repairs and maintenance costs. As well, keep receipts for all your expenses related to buying and owning your home as this will make the process easier for you.
Canada’s First-Time Home Buyers’ Tax Credit
Also known as HBTC, this is a non-refundable tax credit that can provide first time home buyers with up to $1500 in federal tax relief. The incentive aims to encourage first-time buyers to enter the real estate market. You can claim up to $10,000 if you or your spouse (or common-law partner) bought a qualifying home, however your combined total must not exceed $10,000.
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Claim Moving Expenses
If you moved at least 40 km closer to your job or business, you may be able to claim moving expenses on your tax return. Eligible deductions include storage costs, movers, insurance, vehicle expenses, costs of canceling your lease, utility hookups and temporary living expenses for up to 15 days.
Land Transfer Tax Credit (LTT)
In some provinces, including Ontario, British Columbia and Prince Edward Island, this tax credit can be used to reduce the amount of land transfer taxes that you are required to pay. To qualify for this refund, you must be a first-time buyer purchasing an existing home or building and living in it as your primary residence.
With the right knowledge, completing your taxes as a first-time homeowner doesn’t have to be hard. In fact, by utilizing these tips you can save money and get the most out of your tax deductions.
