Tax Deductions for Homeowners in Canada: What You Can Claim in 2026
Tax Deductions for Homeowners in Canada
Don’t leave money on the table when you file this spring.
Owning a home in Canada is expensive, but the tax system offers several specific credits and deductions to help soften the blow. Whether you bought your first condo, added a suite for your in-laws, or work from your kitchen table, you may be eligible for significant relief.
Here is your complete guide to homeowner tax claims for the 2026 filing season.
1. For New Buyers: The Big Credits
If you purchased a home in 2025, you have access to three powerful tools.
First-Time Home Buyers’ Tax Credit (HBTC)
This is a non-refundable tax credit that helps cover closing costs like legal fees and inspections.
- The Amount: You can claim up to $10,000 of the purchase price, resulting in a direct tax rebate of $1,500 (15% of $10,000).
- Eligibility: You (and your spouse) must not have lived in a home owned by either of you in the current year or the four preceding years.
- Note: If you bought a home for a related person with a disability, you may qualify even if you are not a first-time buyer.
Home Buyers’ Plan (HBP) Repayment
If you withdrew money from your RRSP to buy your home, check your “Notice of Assessment” from last year.
- Withdrawal Limit: The limit for withdrawals remains $60,000.
- Repayment: You typically have 15 years to repay the funds to your RRSP. Repayments usually start the second year after the withdrawal. If you don’t make the repayment, that amount is added to your taxable income for the year.
First Home Savings Account (FHSA)
If you opened an FHSA in 2025:
- Deduction: Contributions you made (up to $8,000 for the year) are 100% tax-deductible, reducing your taxable income just like an RRSP.
- Carry Forward: If you opened the account in 2024 but didn’t max it out, you can carry forward up to $8,000 of unused room, meaning you could potentially deduct up to $16,000 in 2025.
2. For Renovators: Accessibility & Multigenerational Living
The government is heavily incentivizing “aging in place” and multi-family living arrangements.
Multigenerational Home Renovation Tax Credit (MHRTC)
Did you build a secondary suite for a senior parent (65+) or an adult with a disability?
- The Claim: You can claim 15% of your renovation costs, up to a maximum of $50,000 in expenses.
- The Refund: This translates to a tax refund of up to $7,500.
- The Rules: The suite must be a self-contained unit (kitchen, bathroom, sleeping area) within your property.
Home Accessibility Tax Credit (HATC)
This is for renovations that improve safety or accessibility for a senior or disabled person (e.g., walk-in tubs, wheelchair ramps).
- The Limit: You can claim up to $20,000 in eligible expenses for the 2025 tax year.
- Double Dipping: For the 2025 tax year (filed in 2026), you can often claim the same expense under both the HATC and the Medical Expense Tax Credit, maximizing your return. Note: New proposals may restrict this double-dipping for tax years 2026 and onward, so claim it now while you can.
“Greener Homes” Update
- The Grant: The popular Canada Greener Homes Grant is largely closed to new applicants as of early 2024/2025.
- The Loan: The Canada Greener Homes Loan (interest-free up to $40,000) closed to new applications in October 2025.
- New for 2026: Watch for the Canada Greener Homes Affordability Program, which aims to cover the full cost of retrofits for low-to-median income households, replacing the old grant system.
3. For Remote Workers: Home Office Expenses
The “flat rate” method ($2/day) that was popular during the pandemic is gone. To claim home office expenses for 2025/2026, you must use the Detailed Method.
- Requirement: Your employer must sign a T2200 form (Declaration of Conditions of Employment) stating you are required to work from home.
- What You Can Deduct:
- Electricity, heat, and water (utilities).
- Home internet access fees (not connection fees).
- Maintenance and minor repairs.
- Rent: If you rent your home, you can claim a portion of the rent. Mortgage interest is NOT deductible for employees.
4. For Landlords: Rental Income Deductions
If you rent out a property (or a room in your house), you can deduct virtually all “current” expenses involved in earning that income.
- Mortgage Interest: You can deduct the interest (not the principal) on your mortgage.
- Property Taxes & Insurance: Deductible in proportion to the rental space.
- Utilities: Deductible if you pay them for the tenant.
- Advertising: Costs to list the unit on sites like Kijiji or Facebook Marketplace.
Homeowner Tax FAQs
Contact us to receive a custom list of homes with secondary suite potential to maximize your tax benefits.
Can I deduct my mortgage interest?
If it is your primary residence: No. In Canada, mortgage interest on your own home is not tax-deductible (unlike in the USA). If it is a rental property: Yes. You can deduct the interest portion of your mortgage payments against your rental income.
What is the 40km rule for moving expenses?
If you moved at least 40 kilometers closer to a new work location or post-secondary school, you can deduct eligible moving expenses. This includes movers, vehicle expenses, lease cancellation fees, and even legal fees for buying your new home (if you sold your old one).
Can I claim the First-Time Home Buyers’ Credit if I bought 3 years ago?
No. The HBTC must be claimed on the tax return for the year you acquired the home. However, if you forgot to claim it in the year you bought it, you can request an adjustment to that past year’s tax return (going back up to 10 years).
Does the “anti-flipping” tax affect me?
Yes. If you sell a residential property (including rental properties) that you have owned for less than 12 months, the profit is now fully taxable as business income (100% inclusion rate), not capital gains (50% inclusion rate), unless you meet specific life-event exceptions like death, divorce, or a job relocation.
Is the GST/HST New Housing Rebate still available?
Yes. If you bought a newly built home (or substantially renovated one) priced under $450,000, you may be eligible for a rebate of some of the GST/HST paid.
