Tips for Maximizing Your Homeowner Tax Deductions

Homeownership is a dream for many, but it also comes with its fair share of expenses. From mortgage payments to property taxes, the costs of owning a home can add up quickly.

Fortunately, there are several legitimate tax deductions that homeowners in Canada can claim at the federal level to help offset some of these expenses.

Here are some of the most common tax deductions for homeowners in Canada as of 2020:

1. Home Accessibility Tax Credit: This tax credit can be claimed by homeowners who have made certain renovations to their homes to make them more accessible for individuals with disabilities. Eligible expenses can include things like wheelchair ramps, grab bars, and walk-in tubs.

2. Home Buyers' Amount: This tax credit is available to first-time homebuyers and can be claimed for expenses like legal fees, land transfer taxes, and home inspections.

3. Medical Expenses: If you have made eligible renovations to your home to accommodate a disability or medical condition, you may be able to claim these expenses as a medical expense deduction on your tax return.

4. Interest on Rental Property Loans: Homeowners who have rental properties can claim the interest paid on their mortgage as a deduction on their tax return.

5. Home Office Expenses: If you use a part of your home as a home office, you may be able to deduct certain expenses related to your business, such as a portion of your mortgage interest and property taxes.

It's important to note that the specific rules and eligibility criteria for each of these deductions can vary, so it's a good idea to consult with a tax professional or use tax preparation software to ensure that you're claiming all of the deductions that you're entitled to.

Additionally, provincial tax deductions may also be available for homeowners in certain provinces.

It's worth mentioning that as of 2018, the federal government eliminated the tax deduction for mortgage interest for homeowners. However, the interest paid on a loan used for certain investments, such as a rental property or a business, may still be deductible.

Additionally, the interest paid on a line of credit or loan used to make eligible home renovations may be eligible for a tax deduction as a medical expense.

It's important to note that the specific rules and eligibility criteria for each of these deductions can vary, so it's a good idea to consult with a tax professional or use tax preparation software to ensure that you're claiming all of the deductions that you're entitled to.

Additionally, provincial tax deductions may also be available for homeowners in certain provinces.