If you bought or sold your home this year or plan to buy or sell a home soon, High & Wide Financial has the information to help you.
Principal Residence Exemption
When you sell your principal residence, did you know that any profit (capital gain) may be exempt from taxes? In fact, if your home was your primary residence for every year that you owned it, you do not have to pay tax on the capital gain.
Your principal residence can be any of the following:
- a house, cottage or condominium
- an apartment in an apartment building or a duplex
- a trailer, mobile home, or houseboat
For a property to qualify as your principal residence:
- You must own, or jointly own the property.
- You, your current or former spouse or common-law partner, or any of your children must have lived in the property at some time during the year.
To benefit from the principal residence exemption, you must report the sale appropriately on your income tax and benefit return. Only one property can be designated as a principal residence per tax year per family unit. A family unit includes you, your current or former spouse (or common-law partner) and any children under the age of 18.
Home Buyers’ Amount
You can claim the home buyers’ amount of up to $5,000 on your income tax and benefit return for a particular year if both of the following apply:
- you or your spouse or common-law partner acquired a qualifying home; and
- you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
Home Buyers’ Plan
You may be eligible to participate in the Home Buyers’ Plan which allows you to withdraw funds from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself. Buyers have up to 15 years to repay the amounts they withdraw.
To qualify for the Home Buyers’ Plan, you have to meet these three conditions:
- you are a first-time home buyer
- you have a written agreement to buy or build a qualifying home for yourself
- You must intend to live in the qualifying home as your principal residence within one year of buying or building it.
You are considered a first-time home buyer if, in the preceding four-year period, you did not live in a home that you or your spouse or common-law partner owned.
GST/HST Rebate on New Homes in Canada
If you bought a newly constructed home from a builder, you may be able to claim a new housing rebate for some of the goods and services tax/harmonized sales tax (GST/HST) you paid.
If you constructed or substantially renovated a house for use as your primary place of residence, you may also be eligible for this rebate.
Home Accessibility Expenses
If you are a qualifying individual (65 years of age or older at the end of tax year or eligible for the disability tax credit), you may be able to claim eligible expenses paid for renovations that make your dwelling more accessible.
We are here to help
Taxes on buying or selling a home can be very complicate. Please contact High & Wide Financial for help. We make sure that you comply with all the government regulations when you buy or sell a home.