The 2024 tax filing season is nigh. Whether a client is saving for a home, already owns one or has sold their primary residence, there are plenty of ways they could save on their tax return. Here is a summary of seven ways your client can put money back in their pocket.
Home buyers’ plan
How much? The tax-free withdrawal limit from an RRSP account is $60,000 under the federal government’s home buyers’ plan (HBP).
Who’s eligible? Any Canadian resident with an RRSP account who is a first-time homebuyer or is purchasing the home for an eligible disabled person.
What are the details? Withdrawals made between Jan. 1, 2022 and Dec. 31, 2025 have a repayment period that starts at the fifth year following the year the first HBP withdrawal was made. Both the homebuyer and their spouse or common-law partner can participate in the HBP for the same qualifying home.
Caveats. A homebuyer cannot use any amount transferred from their First Home Savings Account (FHSA) to their RRSP for HBP purposes and they cannot use their FHSA to repay their HBP withdrawals. They must intend to occupy the qualifying home as their principal residence within one year of buying or building it.
FHSA
How much? FHSA account holders can contribute, or transfer from their RRSPs, up to $8,000 per year with a lifetime limit of $40,000. Contributions are tax deductible and growth is tax-free.
Who’s eligible? Any Canadian resident adult who is a first-time homebuyer.
What are the details? There’s no tax levied if the FHSA withdrawal is used to buy a qualifying home. The account can be open for up to 15 years, or until the account holder turns 71. There are no immediate tax consequences if the FHSA is transferred into an RRSP or RRIF.
Caveats. Contributions made to FHSAs, including unused FHSA contributions from 2023, may be deductible on your 2024 tax return, but there is an $8,000 carryforward limit at the end of each year.
Home buyers’ amount
How much? Home buyers can claim $10,000 on their tax return during the year they purchase their home for a maximum tax credit of $1,500.
Who’s eligible? A Canadian resident who bought a qualifying home and is a first-time home buyer. Only one person in a couple needs to fulfill this requirement to claim the credit, unless they are eligible for the disability tax credit (DTC).
What are the details? This amount can be split with a spouse or common-law partner, but the total claim cannot be more than $10,000.
Caveats. The buyer must intend to occupy the home as a principal residence no later than one year after it is acquired.
Home accessibility tax credit
How much? Claim up to $20,000 in qualifying home renovation expenses for a tax credit of up to $3,000.
Who’s eligible? Canadian residents aged 65 or older, or those eligible for the DTC.
What are the details? Renovations must allow a qualifying individual to access their home or reduce the risk of harm while in the home. Both work performed and material acquired for the renovation are eligible expenses.
Multigenerational home renovation tax credit
How much? Claim 15% of qualifying renovation expenses to receive a maximum $7,500 tax credit.
Who’s eligible? This credit is available if the renovation costs create a secondary unit in the property, the renovation was completed in the tax year claimed regardless of when it began, and one of the individuals living on the property is 65 or older, or qualifies for the DTC and is a Canadian resident.
What are the details? Reasonable material, labour, permit and equipment rental costs all qualify. Recurring maintenance, appliances, outdoor maintenance, housekeeping, financing costs and expenses already claimed under the medical expense tax credit or home accessibility tax credit don’t qualify.
Caveats. One claim per lifetime.
GST/HST new housing rebate
How much? New home buyers can claim a rebate for some of the GST/HST paid for qualifying residence purchases and expenditures.
Who’s eligible? Canadian residents who bought from a builder, purchased shares from a co-op or constructed their own new or substantially renovated home. New or substantially renovated mobile and floating homes may also qualify.
Caveats. If the buyer built the home, it must be worth less than $450,000. It must be the buyer’s primary residence.
Principal residence exemption
How much? A capital gains exemption on the value of a primary residence sold.
Who’s eligible? Canadian residents who sold their primary residence and realized a capital gain.
What are the details? The seller must ensure they report the disposition and designate the property as their principal residence on their tax return.
Caveats. Based on the residential property flipping rule, if the property is sold after being owned for less than 365 days and the seller doesn’t qualify for a life event exception, any profit from the sale will be taxed as ordinary business income.