Property tax breaks and rebates in Ontario

Property tax breaks and rebates in Ontario

It is safe to assume that being a homeowner is almost everyone’s dream. We work hard to save for a downpayment, we make that house a priority on our list of goals, and we survive the entire process. Awesome! Unfortunately, getting the keys to our house does not put an end to the costs we have. In addition to your mortgage, you also have to account for utility bills, insurance, property taxes and a few other maintenance costs that come with owning a house.  However, in the middle of all this there are some good news delivered by both the federal and provincial governments to help ease the financial burden of buying and owning a property. 

HBTC – First-Time Homebuyer Tax Credit

If you are purchasing your first home, you have the chance to take advantage of the First-Time Homebuyer Tax Credit on your new home purchase. This tax credit allows Canadians to claim a portion of their home purchase on their personal tax return that same year. It can be claimed up to a maximum of $750 in federal tax relief for eligible individuals. 

Home accessibility tax credit (HATC)

This tax credit is for seniors (older than 65) who wish to make their home safe and easily accessible, especially if there are mobility issues. In this case, you can potentially write off up to $10,000. How do you qualify? The renovation has to help with the mobility issue, access and function in the home; if you are conduction the renovation yourself, you may claim expenses for building materials, fixtures, and equipment rental. Also, if you are not a senior, but are supporting one, such as an elderly parent who lives with you, and you spend $5,000 to make your home accessible to the mobility, you may be able to claim that amount on behalf of your parent on your own personal tax return. 

Land transfer tax rebate for first-time homebuyers

This is one is for Ontario. This rebate is meant to help offset the cost of land transfer tax, a fee applied each time we buy a property.  If you are in Toronto, you actually need to pay it twice (see our blog post on this topic), since there is also a municipal land transfer tax. If you are a first-time homebuyer living in Ontario, you can qualify for a rebate equal to the full amount of your land transfer tax, up to a maximum of $4,000.  By the same token, there is also a rebate to cover Toronto Land Transfer Tax for first-time buyers, equal to the full amount of the municipal land transfer tax, up to a maximum of $4,475. To qualify for this, you must be a Canadian citizen or permanent Canadian resident, 18 years or older, purchasing a home for the first time, living in the home within nine months of purchasing it, and if you have a spouse, they cannot have owned a home at the same time they were married to you (or common law).

GST/HST New Housing Rebate

If the property you are purchasing is a newly built home, you will have to pay GST or HST on the purchase price, similar to almost every product we buy.  When it comes time to file for your taxes, you might be able to get most of that money back.  You may qualify if the home you bought is your principal residence and is less than $450,000. In Ontario, we also have the advantage of claiming the provincial portion of the HST if we purchase, build, or make major home improvements on our houses.