Key Takeaway Box
- The BC renter credit is a new income-tested tax credit for renters in British Columbia.
- You can claim up to $400 if your adjusted income is $60,000 or less, or a reduced amount if your adjusted income is between $60,000 and $80,000.
- You must rent in BC for at least six months of the year and meet other eligibility criteria to qualify for the credit.
- You can claim the credit on your 2023 T1 Income Tax and Benefit Return, which you can file starting in early 2024.
- The credit is administered by the Canada Revenue Agency (CRA) for the province.
Are you a renter in BC who wants to save some money on your taxes? If so, you might be eligible for a new tax credit that could put up to $400 back in your pocket. In this article, we will explain everything you need to know about the BC renter credit, including how it works, who can get it, and how to claim it. We will also share some tips on how to maximize this financial advantage and make the most of your rental situation. Let’s get started, Hustlers!
What is the BC renter credit?
The BC renter credit is a new tax credit that was introduced in the 2023 provincial budget. It is designed to help low- and moderate-income renters in BC afford their housing costs and reduce their tax burden. The credit is based on your annual income and the amount of rent you pay. The credit is not a refundable tax credit, which means it can only reduce your tax payable to zero. However, if you have other refundable tax credits, such as the GST/HST credit or the climate action tax credit, you can still receive them even if your tax payable is zero.
How much is the BC renter credit?
The amount of the BC renter credit depends on your adjusted income, which is the total of your net income and your spouse or common-law partner’s net income (if applicable) with certain adjustments. These adjustments are the same as those used in the calculation of adjusted family net income for other tax credits. For the 2023 tax year, the maximum amount of the BC renter credit is $400. However, the credit is reduced by 2% of the amount by which your adjusted income exceeds $60,000. The credit is reduced to zero at $80,000. The adjusted income threshold of $60,000 will be indexed to inflation each year.
| Adjusted Income | BC Renter Credit |
|---|---|
| $60,000 or less | $400 |
| $65,000 | $300 |
| $70,000 | $200 |
| $75,000 | $100 |
| $80,000 or more | $0 |
IMPORTANT LINKS:
- What Expenses Can You Deduct from Your Rental Income? (Updated 2024)
- How to Get Your EITC Refund Faster in 2024
- CPP, RRSP, TFSA, FHSA, AMT and OAS Changes: What You Need to Know for 2024
- What Happens to Your CPP and OAS Benefits When Your Spouse Dies?
- How to Get the Grocery Rebate Payments in Canada in January 2024
Who is eligible for the BC renter credit?
To qualify for the BC renter credit, you must meet the following criteria:
- During the year, you occupied a rental unit in BC under a tenancy agreement, licence, sublease agreement or similar arrangement for at least six one-month periods.
- Rent was paid for that rental unit.
- On December 31 of the tax year, you were a resident of BC and you were either 19 years of age or older, a parent, or cohabiting with a spouse or common-law partner.
- You cannot claim the BC renter credit if you are the cohabiting spouse or common-law partner of a renter who has already claimed the credit for the tax year, you were confined to a prison or similar institution for more than six months during the year, you were an employee of a foreign country or a family member or a servant of the employee of a foreign country, or you died before the end of the year.
Rent does not include amounts paid to non-arms length landlords, such as parents, siblings or relatives, under a rent-to-own plan, by your employer for accommodation that is not required to be included in your income, or for a campsite, moorage or manufactured home site.
An eligible rental unit is a living accommodation in BC, such as a single-family dwelling, apartment, condominium, townhouse, basement suite, detached suite, carriage house, co-operative housing, college and university dormitory, long-term care facility, or shared housing (roommates). The rental unit must be rented for at least six one-month periods in the year and rent must be paid for that rental unit.
How to claim the BC renter credit?
To claim the BC renter credit, you must file your 2023 T1 Income Tax and Benefit Return. You can start filing your 2023 income tax return starting in early 2024. You do not need to submit a separate application or any receipts or documents to prove your rent payments. However, you should keep them for your records in case the CRA asks you to verify your information. The CRA will calculate the amount of your BC renter credit based on the information you provide on your income tax return. The credit will be applied to reduce your provincial tax payable. If you have any questions about the BC renter credit or your income tax return, you can contact the CRA or visit their website¹.
Tips to maximize the BC renter credit
Here are some tips on how to make the most of the BC renter credit and improve your financial situation as a renter in BC:
- Plan your budget and track your expenses. Rent is usually one of the biggest expenses for most people, so it is important to know how much you can afford and how much you are spending on rent and other housing-related costs. You can use online tools, apps, or spreadsheets to help you create and manage your budget. You can also look for ways to reduce your expenses, such as sharing a rental unit with roommates, negotiating a lower rent with your landlord, or finding cheaper alternatives for utilities, internet, or cable.
- Save and invest your money. If you receive the BC renter credit or any other tax refunds or credits, you can use them to boost your savings and investments. You can put your money in a high-interest savings account, a tax-free savings account (TFSA), a registered retirement savings plan (RRSP), or other investment vehicles that suit your goals and risk tolerance. You can also use your money to pay off any high-interest debt, such as credit cards or payday loans, or to build an emergency fund for unexpected expenses or income loss.
- Learn about other benefits and programs for renters. The BC renter credit is not the only benefit or program that can help you as a renter in BC. There are also other provincial and federal benefits and programs that can provide you with financial assistance, subsidies, rebates, or discounts, depending on your income, family size, age, disability, or other factors. Some examples are the BC Housing Rental Assistance Program², the BC Hydro Customer Crisis Fund³, the BC Seniors’ Home Renovation Tax Credit⁴, and the Canada Child Benefit⁵. You can check your eligibility and apply for these benefits and programs online or by contacting the relevant agencies.
Conclusion
The BC renter credit is a new tax credit that can help you save up to $400 on your taxes if you are a low- or moderate-income renter in BC. To get the credit, you must rent in BC for at least six months of the year and meet other eligibility criteria. You can claim the credit on your 2023 income tax return, which you can file starting in early 2024. The credit is administered by the CRA for the province. By following the tips in this article, you can maximize the BC renter credit and improve your financial situation as a renter in BC. Remember, Hustlers, every dollar counts!
Source: (1) B.C. renter’s tax credit – Province of British Columbia. https://www2.gov.bc.ca/gov/content/taxes/income-taxes/personal/credits/renters-tax-credit. (2) B.C. renter’s tax credit – Province of British Columbia. https://www2.gov.bc.ca/gov/content/taxes/income-taxes/personal/credits/renters-tax-credit?keyword=23. (3) Spotlight on tax and benefit programs – Province of British Columbia. https://www2.gov.bc.ca/gov/content/taxes/tax-updates/spotlight-on-tax-and-benefit-programs. (4) B.C. introduces renter’s tax credit | Advisor.ca. https://www.advisor.ca/tax/tax-news/b-c-introduces-renters-tax-credit/.