If you bought, renovated, or sold homes in 2021, you would want to make sure to take advantage of credits and rebates, as well as stay on track of your tax reporting obligations. The Canada Revenue Agency (CRA) provided highlights of what taxpayers need to know and outlined credits, rebates, and reporting requirements in a release from March 24, 2022.
For those who bought a qualifying home last year, the home buyers’ amount is a non-refundable tax credit of up to $750.
To be eligible for the $5,000 tax credit, taxpayers must be first-time homebuyers: they must not have lived in another home they owned (or that their spouses or common-law partners owned) in the year of purchase or any of the four preceding years.
The taxpayer and their spouse or common-law partner (or another individual with whom they acquired the home) can split the claim, but the combined total cannot exceed $5,000, according to the release.
If a taxpayer is eligible for the disability tax credit or is buying a home for a disabled relative, they do not have to be a first-time buyer. The property must be purchased “to allow the person with the disability to live in a home that is more accessible, more mobile or functional, or better suited to their needs,” according to the release.
Taxpayers may claim a housing rebate for a portion of the GST/HST paid when purchasing a newly built house, building a house, or substantially renovating a house that will be used as a primary residence.
According to the release, “as a purchaser, you should ensure that you have not already been credited the new housing rebate by your builder as part of your purchase and sale agreement.”
Eligible renovation expenses can be claimed for improvements that enhance accessibility or functionality. To be eligible, a taxpayer must be 65 years old or older by the end of 2021 or be eligible for the disability tax credit (or be an eligible individual).
Taxpayers who sold a property in the previous year must report the sale, even if it was a principal residence. To claim the principal residence exemption, taxpayers must report on their tax returns the disposition and designation of qualifying property as their principal residence.
Taxpayers may owe tax on any gain on the sale of a property that was not a principal residence or was not a principal residence every year it was owned if they bought the property primarily to sell or rent it out.
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