Tax Incentives for Homeowners, First-Time Buyers, and Landlords in 2024

The Canada Revenue Agency (CRA) offers tax measures to help Canadians manage housing costs, save for their first home, and support housing-related decisions.

Saving for Your First Home

Home Buyer’s Plan (HBP)

  • Withdraw up to $60,000 tax-free from your RRSP to buy or build a qualifying home.
  • For withdrawals made between Jan 1, 2022 – Dec 31, 2025, the repayment period starts five years later (instead of two).
  • Both spouses or common-law partners can use the HBP for the same home.

First Home Savings Account (FHSA)

  • Annual contribution limit: $8,000, lifetime limit: $40,000.
  • Contributions are tax-deductible, and withdrawals for a home purchase are tax-free.
  • Unused contribution room carries forward for future years.
  • Can be combined with the HBP if all conditions are met.

Tax Incentives for Home Buyers

Home Buyers’ Amount

  • Non-refundable tax credit worth up to $1,500 (15% of $10,000).
  • Available to first-time home buyers or those eligible for the Disability Tax Credit (DTC).
  • Can be shared between spouses but cannot exceed $10,000 total.

Tax Benefits for Homeowners

Home Accessibility Tax Credit (HATC)

  • Claim up to $20,000 in renovation expenses for a $3,000 tax credit.
  • Applies to accessibility improvements for homeowners 65+ or those eligible for the DTC.

Multigenerational Home Renovation Tax Credit (MHRTC)

  • Refundable tax credit of 15% on up to $50,000 in eligible renovation expenses.
  • Must create a self-contained living space for a senior or adult eligible for the DTC.

GST/HST New Housing Rebate

  • Available for purchasing or renovating a home, including new builds and cooperative housing.

Tax Rules for Selling a Home

Principal Residence Exemption

  • Reduces or eliminates capital gains tax on the sale of a principal residence.
  • Sale must be reported, and only one property per family can be designated per year.

Residential Property Flipping Rule

  • Properties sold within 365 days of purchase are taxed as business income unless exempt (e.g., job relocation, divorce).
  • BC Flipping Tax: Properties sold within two years are subject to additional taxes.

Tax Measures for Rental Property Owners

Purpose-Built Rental Housing (PBRH) Rebate

  • Offers GST/HST rebates for constructing new rental properties, including apartments, student housing, and seniors’ residences.

Underused Housing Tax (UHT)

  • 1% federal tax on vacant or underused residential properties, mainly affecting foreign owners.

Short-Term Rental Rules

Definition

  • Rentals of less than 90 consecutive days through platforms like Airbnb or VRBO.

Key Compliance Requirements

  • Licensing & Registration: Must comply with municipal and provincial laws.
  • Reporting Income: Rental income must be declared on tax returns (Form T776).
  • Deductions & Expenses: Mortgage interest, maintenance, and platform fees are deductible only for compliant rentals.

For more details, visit canada.ca/housing-cra.

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