VANCOUVER, March 22, 2017 – Owning your own home is an exciting time, but the complications in your tax return can damper that excitement. The Chartered Professional Accountants of British Columbia (CPABC) has prepared some tips for new homeowners:
1. Don’t forget about the first-time home buyer’s tax credit.
You might qualify for a home buyers’ tax credit, which is a non-refundable tax credit worth up to $750. To qualify for the credit, the following conditions must be met: you or your partner must acquire a qualifying home and that neither you nor your partner owned and lived in another home owned by either of you in the year you purchased your new home or in any of the four preceding calendar years. Check with a chartered professional accountant today to see if your home is considered a qualifying home.
2. Look into deductible expenses if you rent out your house.
If you rent out all or a portion of your house, you may deduct certain expenses connected with your rental income. These expenses include a proportion of your property taxes, mortgage interest, repairs and maintenance, insurance, light, heat, other utilities, and other expenses that relate to the rental space of your house. You can also want to look into claiming a capital cost allowance on any depreciable assets in your rental property. However, be aware that claiming a deduction for capital cost allowance on your house might jeopardize your ability to claim the principal residence exemption to offset the future sale of your home.
3. Be familiar with the term “change in use.”
If, during the year, you begin to use your home as a rental property, you have what is called a “change in use,” which could lead to a significant and unexpected income tax liability. You should consult a chartered professional accountant to understand the income tax implications if you plan on renting out your home.
Get more tax saving tips with CPABC’s RRSP and Tax Tips at www.rrspandtaxtips.com.
NOTE TO JOURNALISTS: Local CPAs are available for interview. Infographic is available for reprint.
Please credit Chartered Professional Accountants of British Columbia (CPABC) for use of the content and include the following disclaimer: Tax rules relating to these RRSP tips are complex. This is not intended as tax advice and you should not make tax decisions based solely on the information presented in these tips. You should seek the advice of a chartered professional accountant before implementing a tax plan or taking a tax filing position.
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for almost 35,000 CPA members and 5,500 CPA students and candidates. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
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For more information or to arrange an interview, contact:
Vivian Tse, Public Affairs Specialist