Owning a home in Calgary offers several tax-saving opportunities that many homeowners aren’t aware of. From tax credits for first-time buyers to deductions for rental properties, understanding these benefits can make a big difference in reducing your tax burden.
Keep reading this guide, as we walk through nine key tax deductions and credits available for homeowners in Calgary, Alberta.
1. Home Buyers’ Amount
If you’re a first-time homebuyer in Calgary, you may qualify for the Home Buyers’ Amount (formerly known as Home Buyer’s Tax Credit). This credit allows you to claim up to $5,000 when you purchase a qualifying home.
Even better, the claim can be split between spouses or common-law partners, although the combined claim cannot exceed the $5,000 limit. This is a great way to recoup some of the costs of buying your first home.
2. Mortgage Insurance Premiums
If your household income is below $100,000, you can deduct up to 100% of your mortgage insurance premiums. Mortgage insurance is often required if you made a down payment of less than 20%, and this deduction can help reduce your overall homeownership costs.
This is especially valuable for new homeowners who may be paying off a higher loan-to-value mortgage. Learn more here.
3. Property Taxes for Rental Properties
If you rent out a part of your home or own a separate rental property, you’re eligible to deduct property taxes related to that portion of the home. For example, if you rent out your basement, you can deduct a proportional amount of your property taxes for that section.
Additionally, if you own a property solely for rental purposes, the entire property tax is deductible, giving landlords a significant tax break. Learn more.
4. Home Accessibility Tax Credit (HATC)
The Home Accessibility Tax Credit is available to homeowners who are making renovations to improve the accessibility of their home for seniors or individuals with disabilities. You can claim up to $10,000 in renovation expenses, and 15% of these costs can be claimed as a non-refundable tax credit.
This tax break helps homeowners cover the costs of necessary upgrades, such as wheelchair ramps or stairlifts, making homes safer and more accessible.
5. Moving Expenses
Did you know you can claim moving expenses if you moved for work or full-time education? If your new home is at least 40 kilometers closer to your new workplace or school, you may be able to deduct various moving-related costs, including transportation, storage, and even the cost of selling your old home.
This deduction helps ease the financial strain of relocating, making it more affordable to move for better opportunities. Learn more here.
6. Rental Property Deductions
Homeowners who rent out part of their property can also benefit from rental property deductions. In addition to deducting property taxes, you can also deduct a portion of your mortgage interest and other expenses related to maintaining the rented part of your home.
If you own a rental property solely for generating income, you can deduct the full mortgage interest, which can lead to significant savings on your taxes. Learn more here.
7. Calgary Property Tax Assistance Program
For homeowners facing financial hardship, the Calgary Property Tax Assistance Program provides relief. Eligible homeowners may qualify for credits or grants to offset increases in their property taxes.
Eligibility is based on income and residency requirements, making this a valuable program for low-income homeowners in Calgary who are struggling to keep up with rising property taxes.
8. Alberta Seniors Property Tax Deferral Program
Seniors in Alberta can take advantage of the Seniors Property Tax Deferral Program, which allows them to defer all or part of their property taxes. This program works by offering a low-interest home equity loan, meaning seniors don’t have to pay their property taxes upfront.
Instead, the deferred amount is repaid when the home is sold or transferred. This program is ideal for seniors who want to stay in their homes but need extra financial flexibility.
9. Medical Expense Claims for Home Renovations
Certain renovations made for medical reasons, such as improving mobility or accessibility, may also be eligible for tax relief under medical expense claims.
For example, modifications like installing grab bars or widening doorways for wheelchair access could qualify as medical expenses. These claims can significantly reduce your taxable income, making it easier to afford necessary home improvements for health-related reasons. Learn more here.
FAQ's
- Can I claim the Home Buyers’ Amount if I’ve owned a home before?
The Home Buyers’ Amount is typically for first-time homebuyers. However, if you haven’t owned a home in the last four years, you may still qualify. - Can I deduct my entire mortgage insurance premium?
Yes, if your household income is below $100,000, you can deduct up to 100% of your mortgage insurance premiums.
Are home accessibility renovations fully refundable?
No, the Home Accessibility Tax Credit allows you to claim 15% of renovation costs up to $10,000 as a non-refundable credit.- What moving expenses can I claim?
You can claim transportation, storage, temporary accommodation, and even some legal fees, as long as your move qualifies under CRA guidelines.
- How do I qualify for the Calgary Property Tax Assistance Program?
Eligibility is based on income and residency. You’ll need to apply through the City of Calgary to determine if you meet the requirements.
In Conclusion...
Understanding and leveraging these tax deductions and credits can help Calgary homeowners save money and reduce their tax burden.
Be sure to consult with a tax professional to ensure you’re taking advantage of all the deductions you qualify for.
Ready to start your home buying journey? Learn the real estate lingo by downloading this Free Home Buyers Glossary here.
