Now is the perfect time to review your real estate finances and prepare for the upcoming tax season. Here are some key considerations for BC homeowners, sellers, and investors:
1. Property Tax Deferment Programs
BC offers several programs to defer property taxes, especially for seniors, families with children, and those experiencing financial hardship. Check if you qualify and save cash flow for other priorities.
2. Mortgage Interest Deduction (for Rental Properties)
If you own a rental property, don’t forget that mortgage interest is a deductible expense. Review your mortgage statements to ensure you’ve accounted for every dollar.
3. Renovation and Maintenance Deductions
For investment properties, costs related to repairs, maintenance, and upgrades may be deductible. Ensure you’ve kept receipts for any improvements made this year.
4. Capital Gains Exemptions
If you sold your principal residence in 2024, you might qualify for the Principal Residence Exemption, allowing you to avoid paying capital gains tax. For other property sales, plan to set aside a portion of your profit for capital gains taxes.
5. Speculation and Vacancy Tax
Ensure you’ve completed the Speculation and Vacancy Tax declaration for 2024. This annual requirement applies to most BC property owners, and exemptions may apply depending on how the property is used or where it's located. Properties on the Sunshine Coast are exempt, and if you require a property for medical reasons in areas that have the S&V Tax, you may also be eligible for exemption.
6. GST on Real Estate Transactions
If you purchased new construction or pre-construction property, GST may apply. Review whether you’re eligible for any rebates, such as the GST New Housing Rebate.
7. Tax Implications of Airbnb and Short-Term Rentals
Earned income from short-term rentals must be reported. Ensure you’ve tracked all related expenses, as they can reduce your taxable income.
8. First-Time Home Buyer Incentives
If you purchased your first home in 2024, you may qualify for tax credits and rebates, such as the BC Home Owner Grant or the First-Time Home Buyer’s Tax Credit.
9. Land Owner Transparency Act Compliance
All landowners in BC must disclose beneficial ownership information through the Land Owner Transparency Registry (LOTR). Ensure your records are up-to-date to avoid penalties.