Ready to buy a house? Here’s what it means for your taxes
If you’re ready to buy a house, then it’s important to know how home ownership will affect your taxes. The good news is that your home is potentially a tax break, through credits or exemptions on profits from selling your family home. First-time home buyers are eligible for a tax credit from the Canadian Revenue Authority (CRA), and you can also use some of your RRSP if needed, to purchase, although the money must be refunded to the account.
- If you’re a first-time homebuyer you’re eligible for the First-time home buyers’ tax credit. It is a $5,000 credit, which works out to a $750 tax saving. You can even split the credit with your significant other if you’re both first-time homebuyers.
- Current homeowners, who are selling their house, will need to report this on Schedule 3, Capital gains when you file your income tax return. For one property per year and provided it is your primary residence, then you do not have to pay tax on the capital gain, thanks to the principal residence exemption.
- While standard renovations don’t apply, you can claim up to $10,000 in expenses for renovations to your principal residence to add accessible for seniors or disabled persons.
“Before you make one of the largest and most important purchases in your life, here are some tax implications you should know.”