Every year, financial organizations across Canada work together to encourage Canadians to learn more about their finances. At the Canada Revenue Agency (CRA), we foster financial literacy by providing taxpayers with comprehensive education on the importance of filing income tax returns and the benefits and credits available to them through the tax system. The CRA is putting special focus on the programs, benefits and credits we administer related to housing. Our primary objective is to empower homeowners to know what is available to them so they can make the most out of their money.

The CRA understands the value of every dollar and wants to help you help your clients put money (that can be used for housing) back in their pockets. In recent years, the Government of Canada (GC) has introduced various benefits, credits, and incentives, largely available through the tax system, designed to help your clients in various aspects of their homeownership journey. These measures are aimed at making housing more affordable and alleviating any financial burdens.

Before your clients can qualify for one of the housing tax incentives, and other benefits and credits, they must file their income tax returns. Here's what you need to know about the CRA’s programs to better support your clients with their housing needs.

First-Time Home Buyers

What’s new for first-time home buyers?

First Home Savings Account (FHSA)

• The FHSA is a registered account that could allow your clients to save for their first home with tax advantages. Contributions are generally tax deductible and withdrawals for the purpose of buying or building a qualifying home are tax-free.

Existing measures for first-time home buyers

Home Buyers’ Plan (HBP)

• The HBP could allow your clients to withdraw up to $35,000 from their registered retirement savings plan (RRSP) to buy or build a home for themselves or a related person with a disability. The withdrawal is tax-free if it’s paid back within the required timeframe.

Did you know: Your clients could withdraw from their FHSA and their RRSP under the HBP for the same home, as long as they meet all of the conditions at the time of each withdrawal.

First-Time Home Buyer’s Tax Credit (HBTC)

• The HBTC could allow first-time home buyers who acquire a home to claim a non-refundable tax credit of up to $1,500.

GST/HST New Housing Rebate

• The GST/HST rebate is available for new home purchases and can reduce upfront costs to help make homeownership more affordable.

Homeowners

What’s new for homeowners?

Multigenerational Home Renovation Tax Credit (MHRTC)

• The MHRTC could provide your clients a valuable refundable credit for eligible expenses related to certain qualifying renovations to create a self-contained secondary unit for an individual to reside with a relative. Your clients could claim up to $50,000 in expenditures for each qualifying renovation that is completed. The tax credit is 15% of your client's costs, up to a maximum of $7,500, for each eligible claim.

Existing measures for homeowners

Home Accessibility Tax Credit (HATC)

• The HATC is non-refundable and applies the lowest personal income tax rate to eligible expenses for renovations, with an annual expense limit of $20,000.

Tax rules homeowners should know

Principal Residence Exemption

• If your clients sell a house that was solely their principal residence for every year they owned it, they do not have to pay tax on the capital gain. However, in order to benefit from this exemption, they must report the sale and designate the property as their principal residence when filing their personal income tax return for the year the property was sold.

Underused Housing Tax (UHT)

• Educate your clients about the annual 1% tax on vacant or underused housing. The CRA has published a new online self-assessment tool that can help your clients find information about specific ownership conditions, including information about exemptions from paying the tax for which they may qualify.

Residential Property Flipping Rule

• Help your clients understand the new rule introduced to ensure that profits from the disposition of flipped properties, including rental properties and assignment sales, are taxed as business income.

Accommodation Sharing

• If your client earns income through online platforms related to housing and accommodations, such as AirBnB, CanadaStays, FlipKey, and VRBO, they should be aware of their tax obligations to stay compliant.

Other ways the GC can help your clients

Did you know that the GC has loans and grants as part of the Canada Greener Home Initiative? There’s also a first-time home buyer incentive and Funding for Indigenous Housing for on and off reserve communities in Canada.

Every year, Canadians leave millions of dollars on the table by not filing their income tax returns. Whether your clients are first-time homebuyers or seasoned homeowners, let’s work together to help them understand the benefits and credits available to them through the tax system, and tax rules associated with homeownership, so they can make the most of what is available to them.

For more information on the CRA’s Financial Literacy Month initiatives, check out Canada.ca/housing-cra.