Truly, there’s no place like home!
Our parents knew it, and their parents knew it. Let me examine how home ownership makes “cents” – from the tax benefits, to good old fashioned financial stability. There’s no question that buying a house makes sense for some folks. Home ownership can be a very knowledgeable financial move – but only if buying homes they can actually afford.
Owning a home gives you stability (you’re not at the mercy of a landlord) and freedom (you can do what you want with the place).
Why not build equity every month? Equity in your home is the amount of money you can sell it for minus what you still owe on it. Paying the mortgage every month will reduce the amount of your principal (amount you owe). In a sense, you are being forced to save—and that’s a good thing!
The benefits of home ownership are noticeable year round.
Here are 7 benefits of home ownership:
- First-Time Home Buyer
If you are a first-time home buyer, you can claim a non-refundable tax credit (refer to CRA for the maximum allowance). This non-refundable tax credit is based on a percentage, if this is your first time into home ownership, then take advantage.
- Renovations for Medical Reasons
Those with mobility issues who need renovations done to accommodate can claim this as an expense as a requirement to make their home more accessible. Keep in mind, however, that medical expense reimbursement has to fall within a 12-month period ending in the current tax year.
3. New Home Rebate
If you bought a new home that cost less than $450,000 or you renovated your home extensively and live in it (it’s your principal residence), you may be able to claim the GST or HST under the new housing rebate. There are even tax deductions for homeowners who built their own homes, as well as rental homes. Speak to your accountant about how these rebates may apply to you in your respective province.
- The Home Buyer’s Plan
The Home Buyer’s Plan allows those who plan to purchase a residence to withdraw up to $25,000 from their RRSP (Registered Retirement Savings Plan) to help with the purchase or even the construction of a home. The best part is that you can pay it back gradually over a 15-year period without penalty.
- Allowable Expenses For Rentals
Renting out a property you own or that you are currently using. Report your rental income and claim allowable expenses like advertising, insurance, gas and interest on the money you borrow to make improvements.
- Working From Home
If you work from home and pay taxes, you can claim heating, home insurance, electricity and even cleaning appliances as expenses. Speak to your accountant.
- Selling Your Home
Typically, sales taxes do not apply when you sell your home, but there are cases where it does. If you built the home or sold a home that you don’t currently live in, then you may have to pay the GST or HST. However, there are a few moving tax deductions available that you may want to take advantage of.
Through my experience as a renter the first few years, it may have been cheaper to rent. But over time as rent payments kept increasing, I realized how much money I was putting into someone else pocket.
Now that I own my own home I see the huge benefits of home ownership.
~ Freedom ~
~ Appreciation ~
~ Mortgage pay down ~
Instead of paying off your landlord’s home or building, pay off your own!
Call us today to see how we can help.