What Canadian homeowners can claim on their 2025 tax return

Updated: April 2026

Homeownership in Canada isn’t cheap — but tax season is one of the few chances homeowners have to put money back in their pockets. In 2026, Canadian homeowners can claim a range of valuable tax deductions, credits, and rebates, especially when their property is used to earn income or qualifies under specific CRA programs.

These include tax breaks for rental properties, home-based businesses, eligible renovation projects, moving expenses, first-time homebuyer incentives, and new-home GST/HST rebates.

This updated guide breaks down everything you can claim in 2026 on your tax filing — from mortgage-related deductions to accessibility credits and rental-property write-offs — so you can maximize your return and avoid missing deductions you’re entitled to.

Can you deduct mortgage insurance in Canada?

You can't claim mortgage insurance costs for your primary residence in your tax return. Mortgage insurance (such as CMHC insurance) is required when you make a down payment of less than 20%. It protects the lender — not the homeowner — if you default on your mortgage.

In Canada, mortgage insurance premiums are not tax-deductible. The CRA treats these premiums as part of the cost of obtaining a mortgage, and they cannot be claimed on your personal income tax return.

If you use your home to earn income (for example, through rental income or a home office), other mortgage-related expenses — such as a portion of mortgage interest or specific loan fees — may be deductible, but the insurance premium itself still is not.

Related: TFSA vs. RRSP vs. FHSA: What's the difference?

Is mortgage interest tax-deductible in Canada?

You can claim mortgage interest on your tax filing — but only for an income-producing property. In Canada, your mortgage interest becomes tax-deductible only when your property is used to generate income such as a rental unit or Airbnb , or a portion of your home is used for business. During tax season, you can claim this deduction on Form T776, under rental income and expenses (line 8710) .

However, only the interest portion of your mortgage is tax-deductible — not the amount that goes toward your principal.

The amount of mortgage interest you can claim for rental purposes depends on whether your property is a long-term rental or a short-term rental.

• Entire-year rental: If your property is rented out for the entire year, you can deduct 100% of the mortgage interest paid on that property.
• Short-term rentals: For part-year or short-term rentals, the deduction must be prorated based on the number of months rented. For example, renting out a property for four months allows you to deduct 4/12 (33%) of the year’s mortgage interest.

Renting out a portion of your home? You must prorate the deduction according to the percentage of the home used for rental space.

Additional rental-related financing costs — such as mortgage application fees, appraisal fees, and mortgage guarantee fees — may also be deducted and are generally amortized over five years.

Can you claim business use of home expenses in Canada?

If you use a property you own to operate a business or earn business income, you may be able to deduct a portion — or in some cases all — of your mortgage interest. Mortgage interest becomes deductible only when tied to income generation.

• Solely income-generating property: If the property is used exclusively for business (for example, a dedicated office or commercial workspace), you can deduct 100% of the mortgage interest as a business expense. These deductions are typically reported on Form T2125.
• Mixed-use property: If only part of the property is used for business — such as a home office or a commercial space with a residence above — you can deduct mortgage interest only for the business-use portion. This is calculated by prorating the square footage (and time, if applicable) dedicated to business activities.

The prorating rules mirror those used for rental properties where only part of the home is rented out: deduct only the percentage of interest tied to the income-producing area.

Related: Will your home insurance cover working from home or having a home business?

Which mortgage-related expenses are tax-deductible in Canada?

The Canadian government allows you to claim certain fees associated with money borrowed for purchasing or improving a rental property. These fees include:

• Mortgage applications, appraisals, and processing fees
• Mortgage guarantee fees (such as those charged by the Canada Mortgage and Housing Corporation )
• Mortgage brokerage and finder’s fees
• Legal fees related to mortgage financing (including those related to drafting mortgage documents or title searches)

Is home insurance tax-deductible in Canada?

Home insurance is considered a personal expense, akin to paying for peace of mind. While it helps safeguard your property and is often necessary for applying for a mortgage, it doesn’t offer any direct tax benefits.

However, there are some exceptions:

• Rental properties: If you rent out part of your property (e.g., a secondary suite or a separate apartment), you may be eligible for deductions related to that rental income.
• Business use: Suppose you’re self-employed and use part of your home for business purposes (for instance, a home office). In that case, you can deduct related expenses.

Eligible expenses may include a portion of your home insurance premium, utilities (heat, water, electricity, internet, phone), condo fees (if any), rental payments, office equipment, and maintenance costs. Proper documentation is your best friend — you’ll need it during tax season.

What tax deductions and credits can homeowners claim in Canada?

Canadian homeowners have several ways to reduce their taxes or make good use of government tax incentives. They include:

• Property taxes: If you own a rental property, rent out a portion of your own primary home, or use it for business, you can deduct property taxes. This includes both land and building property taxes associated with the rental property.
• Home buyers’ amount (formerly known as the home buyers' tax credit): If you’re a first-time homebuyer, you can claim up to $10,000 on line 31270 for purchasing a qualifying property.
• GST/HST new housing rebate: If your home is newly built, you may qualify for this rebate . Your home must be a primary residence.
• Residential rental property rebate: If you’ve purchased or built a residential rental property, you could be eligible for this government rebate.
• Moving expenses: You can claim moving expenses (located on Line 21900) if you’re relocating for work or as a full-time student.

How to claim home office expenses in Canada (CRA rules)

When it comes to home office expenses and tax deductions , there are specific methods you can use to claim eligible costs related to your home office. Let’s break it down:

Eligible employees who worked from home in 2025 will be required to use the detailed method to claim home office expenses. The detailed method involves a more comprehensive calculation of actual expenses related to your home office. You must separate expenses between your employment use and non-employment (personal) use of your home.

To be eligible for a detailed method claim , you must meet the following criteria:

For both business and home office expenses, you’re only allowed to deduct the portion of the expenses related to business usage. For example, if 20% of your cell phone usage is related to business activities, you can only deduct 20% of your monthly bills from your taxable income.

Also, if both you and your spouse worked from home and meet the eligibility criteria, each expense can only be claimed once.

Salaried employees who work from home may be eligible to claim certain home office expenses on their taxes. However, home insurance specifically is not deductible for employees working from home.

Commission employees may have additional options for claiming certain expenses, but the rules can be complex. Consulting a tax professional can help ensure accurate deductions.

Read more: Important dates for small business owners in Canada for 2025

When should you consult a tax professional in Canada?

Navigating the intricacies of home-related tax deductions can be daunting. Every homeowner’s situation is unique. A tax professional can help you optimize your deductions, identify overlooked opportunities, and ensure compliance with tax laws.

While home insurance premiums and other expenses are generally not directly tax-deductible, understanding the rules and exceptions — such as mortgage insurance — can help you with your overall financial planning.

Related: The newcomer’s guide to home ownership

• Your employer required that you work from home.
• You were required to pay for expenses related to the workspace in your home.
• You worked from home for at least 50% of the time for a minimum of four consecutive weeks during the applicable year. Alternatively, if your home workspace is exclusively used for earning employment income and conducting regular meetings (e.g., with customers or clients), you also qualify.
• The claimed expenses are used directly for your work.
• You must have received a signed and completed copy of Form T2200 (Declaration of Conditions of Employment) from your employer.