Do you want to know how to save money for first-time home buyers? First time home buyers and home owners can utilize a number of different strategies and options to save money on their home. This consists of the first time home buyer’s tax credit, the first time home buyer’s plan, the healthy home renovation tax credit, the new home rebate, and claiming home office expenses.
Money Saving Strategies for First Time Home Buyers and Owners
Hi, my name is Allan Madan, your trusted accountant. In this post I’m going to talk about how first-time home buyers and home owners can save money, so continue reading.
Tip Number One – First Time Home Buyer’s Tax Credit:
If you are buying a home for the very first time you can claim a non-refundable tax credit of up to $750. This new tax credit is based on a percentage of $5,000. The following conditions apply:
- You or your spouse or common-law partner acquired a qualifying home
- You did not live in a home owned by you or your spouse or common-law partner in the year of purchase or in any of the four previous years
Tip Number Two – The First Time Home Buyer’s Plan:
The home buyer’s plan is another incentive for those households buying their very first home. With this plan each spouse can withdraw up to $25,000, 100 percent tax free, from their RRSPs, to make their home buying dream come true. The amounts withdrawn are not taxable, but you have to complete form T-1036 in order to make the home buyer’s plan request for withdrawal.
Tip Number Three – The Healthy Home Renovation Tax Credit:
The healthy home renovation tax credit is a refundable tax credit available to seniors and family members who live with them and have bought a home. You can claim up to $10,000 of eligible home improvements on your tax return. The amount of money you get back is equal to 15 percent of the eligible expenses you make. For example, if you spend $10,000 on eligible home improvement expenses, you will receive $1,500 on your tax return.
Tip Number Four – The New Home Rebate:
The next strategy for families that are looking to buy their first home or have already bought a home and have done extensive home renovations is to claim the GST/HST paid under the new housing rebate.
Tip Number Five – Claim Home Office Expenses:
If you are self-employed and work from home you are entitled to a wide range of deductions. Some common home-office expenses include:
- Mortgage interest on your residence
- Property taxes
- Repairs and maintenance
- Home insurance
The percentage of the deductible home-office expenses is equal to the size of your workspace at home relative to the size of your entire home. For example, if your house is 2,000 square feet, but your office is 500 square feet, you would be able to claim 25 percent of your home-office expenses.
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The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.