Home buying season got off to a rather slow start in Canada this year, based on new numbers released by the Canadian Real Estate Association.
In January, property sales slipped more than 3% from the previous month, CREA reported. In fact, in 60 % of housing markets tracked, sales were down from December. On a year-over-year basis, they were roughly in line with how many there were in 2014. CREA posted the full details on its Twitter feed.
Though real estate buying activity is usually down in the winter, it serves as a stark contrast from what transpired throughout much of last year. During the 12-month period, about 481,300 units were purchased by Canadians countrywide, up 5 % from 2013, according to CREA data.
With many of these purchases made by people who were buying a home for the first time, they'll be able to take advantage of some tax benefits with the filing season underway.
The Government of Canada introduced the First-Time Home Buyers Tax Credit in 2009.
In 2009, the Government of Canada introduced the First-Time Home Buyers' Tax Credit. The HBTC enables buyers to better handle many of the costs associated with purchasing a home, such as a down payment, land transfer taxes and legal fees. Those who haven't purchased a home before can get up to $750 off their federal tax bill, provided their home was bought after 2009.
But even if you're not a first-time homeowner, you may be able to capitalize on some other tax incentives.
Unlike in the US, mortgage interest on your principal residence isn't tax deductible; however there are still some tax advantages you could benefit from.
Mortgage Interest Deduction for Investment Properties
If you purchase a property for rental income, one tax incentive is the mortgage interest deduction. According to the Canada Revenue Agency, there are a few different factors that help determine how much interest you can save on your mortgage.
Loan fees that can usually be deducted include application expenses, appraisals, processing and legal costs, among others. An FBC tax specialist can help you understand some of the specifics.
Home Purchase May Make Itemizing Worthwhile
If you've purchased a home, you may want to think about itemizing each transaction and keeping records of each purchase or service. It may seem confusing when looking at a statement from your lawyer, so this is another good reason to have a professional tax preparer handle it all for you.
Mortgage Savings For Investors
Even if you purchased a home for investment purposes, you likely can take advantage of tax deductions that can help lower your tax bill. If you have real estate investment trust or other property-related capital, these are all things that you can use for your financial gain in the filing process.
For more tips on homeownership and taxes, speak with an FBC tax expert.