For GST/HST purposes, the term builder has a very specific meaning that is not limited to a person who physically constructs housing.
Builder, for the purpose of the GST/HST new housing rebate, generally includes a person who is in the business of constructing or substantially renovating houses for sale. The house may be on land owned or leased by that builder. The term builder may also include the following:

• a manufacturer or vendor of a new mobile home or floating home;
• a person who buys a previously unoccupied new house for resale;
• a person who acquires an interest in a house while the house is under construction or substantial renovation, and completes or engages another person to complete the construction or substantial renovation; or
• a person who has converted a non-residential property into a house without substantially renovating the property.

An individual is not a builder unless they acquired, built, or substantially renovated housing, or hired someone else to build or substantially renovate housing, in the course of an adventure or concern in the nature of trade of the individual. For example, an individual who buys, builds, or substantially renovates a house to use as their primary place of residence is generally not a builder of that house for GST/HST purposes. For more information, see GST/HST Info Sheet GI-005, Sale of a Residence by a Builder Who is an Individual.
A person you hire to provide construction services on land you lease or own, and that does not have an interest in that land, is not generally considered to be a builder. For example, a contractor you hire to build your new house, or substantially renovate your existing house, on land you own is not considered to be the builder.
What is a house for purposes of the new housing rebate?A house generally includes a detached or semi-detached single-unit house, a duplex, a condominium unit, a townhouse, a unit in a co-operative housing corporation, a mobile home (including a modular home), and a floating home. In very limited circumstances, a house may include a recreational unit that has been affixed to land and modified to include the characteristics of a house. For more information, see GST/HST Policy Statement P-104, Supply of Land for Recreational Units Such as Mini-homes, Park Model Trailers, and Travel Trailers.
A house may also include nearby buildings such as a detached garage or shed, plus up to one-half hectare (1.23 acres) of the land around and underneath them all, that is reasonably necessary for the use and enjoyment of the housing as a place of residence.
In limited cases, we may consider the amount of land that is reasonably necessary for the use and enjoyment of the house as a place of residence to be more than one-half hectare (for example, when a municipality imposes a minimum lot size or where excess land is necessary to access public roads).
A house may also include a bed and breakfast or similar establishment where rooms are rented for short-term accommodation to the public. However, to be eligible for a new housing rebate for the whole building in these cases, the building has to be used more than 50% as the primary place of residence of you or your relation, either individually or in combination. If 50% or less of the house that includes the bed and breakfast is used as your primary place of residence, or that of a relation, only the part of the building that is the primary place of residence would be eligible for the new housing rebate.
Primary place of residenceOne of the main conditions for a new housing rebate to be available is that you must buy or build the house for use as your or your relation's primary place of residence.
Your primary place of residence is generally a house that you own, jointly or otherwise, and that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary place of residence.

NoteIf you buy or build a new house in Canada but your primary place of residence remains outside Canada, then your house in Canada would be a secondary place of residence and would not qualify for the new housing rebate.
The following are examples of some of the factors we may consider to determine whether a house is your or your relation's primary place of residence for purposes of the new housing rebate:

• whether you consider the house as your main residence;
• the length of time you inhabit the premises; and
• the designation of that address on personal and public records.

To be eligible for the new housing rebate, your intent to use the house as your or your relation's primary place of residence must be evident at the outset of buying, constructing, or substantially renovating the house.
For rebate purposes, a house is not your primary place of residence if, for example, your intention is to use the house as your primary place of residence upon some more distant occasion, such as retirement. Further, a recreational cottage or an investment property is not your primary place of residence for rebate purposes. No new housing rebate is available in these cases.

Generally, the HST at 13% applies to a taxable sale by a builder of newly constructed or substantially renovated housing in Ontario where, under the written agreement of purchase and sale, both ownership and possession of the housing transfer to the purchaser on or after July 1, 2010. However, the provincial part of the HST does not apply to a grandparented sale.

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4022/general-information-gst-hst-registrants.html#H3_372
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​In general, you can deduct any reasonable current expense you paid or will have to pay to earn business income.
The amount you can deduct in a given year for any expense depends if it is considered a current year expense or capital expense. For more information, see Current or capital expenses and Basic information about Capital Cost Allowance. 
The expenses you can deduct include any GST/HST you incur on these expenses less the amount of any input tax credit claimed.
Deduct only the business part of expenses from business income. You cannot deduct personal expenses. In addition, you cannot claim expenses you incur to buy capital property.
Notes
When you claim the GST/HST you paid on your business expenses as an input tax credit, reduce the amounts of the business expenses you show by the amount of the input tax credit. Do this when the GST/HST for which you are claiming the input tax credit was paid or became payable.

Similarly, subtract any other rebate, grant, or assistance from the expense to which it applies. Any such assistance you claim for the purchase of depreciable property used in your business will affect your claim for capital cost allowance (CCA) .

If you cannot apply the rebate, grant, or assistance you received to reduce a particular expense, or to reduce an asset's capital cost, include the total in other income on form T2125 Statement of Business or Professional Acitivities, at Part 3 on line 8230.
The following may be considered when determining operating expenses:

• Advertising
• Allowance on eligible capital property
• Bad debts
• Business start-up costs
• Business tax, fees, licenses and dues
• Business-use-of-home-expenses
• Capital cost allowance
• Delivery, freight, and express
• Fuel costs (except for motor vehicles)
• Insurance
• Interest charges
  • Fees, penalties, or bonuses paid for a loan
  • Fees deductible over five years
  • Fees deductible in the year incurred
  • Interest deductible on property no longer used for business purposes
  • Interest on loans made against insurance policies
  • Capitalizing interest
  • Interest related to work space in your home
• Maintenance and repairs
  • Long-haul truck drivers
  • Extra food and beverages consumed by self-employed
• Management and administration fees
• Meals and entertainment (allowable part only)
• Motor vehicle expenses
• Legal, accounting, and other professional fees
• Prepaid expenses
• Office expenses
• Other expenses
• Property taxes
• Rent
• Salaries, wages, and benefits (including employer's contributions)
• Supplies
• Telephone and utilities
• Travel

Advertising
You can deduct expenses for advertising, including advertising in Canadian newspapers and on Canadian television and radio stations. You can also include any amount you paid for business cards and as a finder's fee. Certain restrictions apply to the amount of the expense you can deduct for advertising in a periodical:

• You can deduct all the expense if your advertising is directed to a Canadian market and the original editorial content in the issue is 80% or more of its total non-advertising content.
• You can deduct 50% of the expense if your advertising is in a periodical directed to a Canadian market and the original editorial content in the issue is less than 80% of its  total non-advertising content.

You cannot deduct expenses for advertising directed mainly to a Canadian market when you advertise with a foreign broadcaster.
Allowance on eligible capital property
You may buy property that does not physically exist but gives you a lasting economic benefit. Some examples are goodwill, franchises, concessions, and licences for an unlimited period. We call this kind of property eligible capital property. The price you pay to buy this type of property is an eligible capital expenditure.
You cannot deduct the full cost of an eligible capital expenditure, since it is a capital cost and provides a lasting economic benefit. However, you can deduct part of its cost each year. We call the amount you can deduct your annual allowance.
We consider franchises, concessions, and licences with a limited period to be depreciable properties, not eligible capital properties.
Bad debts
You can deduct an amount for a bad debt if:

• you had determined that an account receivable is a bad debt in the year
• you had already included the receivable in income

Business start up costs
To deduct a business expense, you need to have carried on the business in the fiscal period in which the expense was incurred. You have to be clear about the date your business started.
Where a taxpayer proposes to undertake a business and makes some initial expenditures with that purpose in mind, it is necessary to establish whether the expenditure preceded the start of the business or whether the business had in fact begun and there were expenses incurred during preliminary steps leading to the start of normal operations.
Consequently, the date when the business can be said to have commenced must be known.
Determining what you can claim as a start up expense can be difficult. For more information, see Interpretation Bulletin IT-364, Commencement of Business Operations, or Guide RC4022, General Information for GST/HST Registrants.
Business tax, fees, licences, and dues
You can deduct any annual licence fees and business taxes you incur to run your business.  
You can also deduct annual dues or fees to keep your membership in a trade or commercial association.
You cannot deduct club membership dues (including initiation fees) if the main purpose of the club is dining, recreation, or sporting activities.
Delivery, freight, and express
You can deduct the cost of delivery, freight, and express incurred in the year that relates to your business.
Fuel costs (except for motor vehicles)
You can deduct the cost of fuel (including gasoline, diesel, and propane), motor oil, and lubricants used in your business.
For information about claiming the fuel used in your motor vehicle, see Motor vehicle expenses .
The cost of fuel related to business use of work space in your home has to be claimed as business-use-of-home expenses .
Insurance
You can deduct all ordinary commercial insurance premiums you incur on any buildings, machinery, and equipment you use in your business.
The insurance costs related to your motor vehicle have to be claimed as Motor vehicle expenses.
The insurance costs related to business use of work space in your home have to be claimed as business-use-of-home expenses.
In most cases, you cannot deduct your life insurance premiums. However, if you use your life insurance policy as collateral for a loan related to your business, you may be able to deduct a limited part of the premiums you paid. For more information, see Interpretation Bulletin IT-309, Premiums on Life Insurance Used as Collateral.
Interest charges
You can deduct interest incurred on money borrowed for business purposes or to acquire property for business purposes. However, there are limits on:

• the interest you can deduct on money you borrow to buy a passenger vehicle. For more information, go to Motor vehicle expenses.
• the amount of interest you can deduct for vacant land

Usually, you can only deduct interest up to the amount of income from the land that remains after you deduct all other expenses. You cannot use any remaining amounts of interest to create or increase a loss, and you cannot deduct them from other sources of income.
Fees, penalties, or bonuses paid for a loan
You can deduct the fee you pay to reduce the interest rate on your loan. You can also deduct any penalty or bonus a financial institution charges you to pay off your loan before it is due. Treat the fee, penalty, or bonus as prepaid interest and deduct it over the remaining original term of your loan.
For example, if the term of your loan is five years and in the third year you pay a fee to reduce your interest rate, treat this fee as a prepaid expense and deduct it over the remaining term of the loan. For more information, go to Prepaid expenses.
Fees deductible over five years
You can deduct certain fees you incur when you get a loan to buy or improve your business property. These fees include:

• application, appraisal, processing, and insurance fees
• loan guarantee fees
• loan brokerage and finder's fees
• legal fees related to financing

You deduct these fees over a period of five years, regardless of the term of your loan. Deduct 20% in the current year and 20% in each of the next four years. The 20% limit is reduced proportionally for fiscal periods of less than 12 months.
However, if you repay the loan before the end of the five-year period, you can deduct the remaining financing fees then. The number of years for which you can deduct these fees is not related to the term of your loan.
Fees deductible in the year incurred
If you incur standby charges, guarantee fees, service fees, or any other similar fees, you may be able to deduct them in full in the year you incur them. To do so, they have to relate only to that year. For more information, see Interpretation Bulletin IT-341, Expenses of Issuing or Selling Shares, Units in a Trust, Interests in a Partnership or Syndicate, and Expenses of Borrowing Money.
Interest deductible on property no longer used for business purposes
You may be able to deduct interest expenses for a property you used for business purposes, even if you have stopped using the property for such purposes because you are no longer in business. For more information, see Income Tax Folio S3-F6-C1, Interest Deductibility.
Interest on loans made against insurance policies
You can deduct interest you paid on a loan made against an insurance policy, as long as the insurer did not add the interest you paid to the adjusted cost base of the insurance policy. To claim the interest you paid for the year, have the insurer verify the interest before June 16 of the following year on Form T2210, Verification of Policy Loan Interest by the Insurer.
Capitalizing interest
You can choose to capitalize interest on money you borrow:

• to buy depreciable property;
• to buy a resource property; or
• for exploration and development.

When you choose to capitalize interest, add the interest to the cost of the property or exploration and development costs instead of deducting the interest as an expense.
Do not deduct the capitalized interest as a current expense. For more information, read "Interest" in Guide T4002, Business and Professional Income.
Interest related to work space in your home
The interest related to business use of work space in your home has to be claimed as business-use-of-home expenses.
Legal, accounting, and other professional fees
You can deduct the fees you incurred for external professional advice or services, including consulting fees. 
You can deduct accounting and legal fees you incur to get advice and help with keeping your records. You can also deduct fees you incur for preparing and filing your income tax and GST/HST returns. For more information, see Interpretation Bulletin IT-99-CONSOLID, Legal and Accounting Fees.
You can deduct accounting or legal fees you paid to have an objection or appeal prepared against an assessment for income tax, Canada Pension Plan or Quebec Pension Plan contributions, or employment insurance premiums. However, the full amount of these deductible fees must first be reduced by any reimbursement of these fees that you have received. Enter the difference on line 232, Other deductions, of your income tax return.
If you received a reimbursement in the tax year, for the types of fees that you deducted in a previous year, report the amount you received on line 130, Other income, of your income tax return.
You cannot deduct legal and other fees you incur to buy a capital property. Instead, add these fees to the cost of the property. For more information on capital property, see Claiming capital cost allowance (CCA).
Maintenance and repairs
You can deduct the cost of labour and materials for any minor repairs or maintenance done to property you use to earn business income.
However, you cannot deduct any of the following

• the value of your own labour
• the costs you incur for repairs that are capital in nature (capital expense)
• the cost you incur for repairs that have been reimbursed by your insurance company

For repairs that are capital in nature, you can claim a capital cost allowance (CCA).
You have to claim the maintenance and repairs related to business use of work space in your home as business-use-of-home expenses.
For more information about capital cost allowance, see Guide T4002, Business and Professional Income.
Management and administration fees
You can deduct management and administration fees, including bank charges, incurred to operate your business. Bank charges include those for processing payments.
Do not include:

• employees’ salaries, wages and benefits (including employer’s contributions)
• property taxes
• rent paid.

Instead, report these amounts separately.
Meals and entertainment (allowable part only)
The maximum amount you can claim for food, beverages, and entertainment expenses is 50% of the lesser of the following amounts:

• the amount you incurred for the expenses; or
• an amount that is reasonable in the circumstances.

These limits also apply to the cost of your meals when you travel or go to a convention, conference, or similar event. However, special rules can affect your claim for meals in these cases. For more information, see Travel and Convention expenses.
These limits do not apply if any of the following apply:

• Your business regularly provides food, beverages, or entertainment to customers for compensation (for example, a restaurant, hotel, or motel).
• You bill your client or customer for the meal and entertainment costs, and you show these costs on the bill.
• You include the amount of the meal and entertainment expenses in an employee's income or would include them if the employee did not work at a remote or special work location. In addition, the amount cannot be paid or payable for a conference, convention, seminar, or similar event and the special work location must be at least 30 kilometers from the closest urban centre with a population of 40,000 or more. For more information about urban centres, see Statistics Canada data on Population and dwelling counts, for urban areas.
• You incur meal and entertainment expenses for an office party or similar event, and you invite all your employees from a particular location. The limit is six such events per year;
• You incur meal and entertainment expenses for a fund-raising event that was mainly for the benefit of a registered charity.
• You provide meals to an employee housed at a temporary work camp constructed or installed specifically to provide meals and accommodation to employees working at a construction site (note that the employee cannot be expected to return home daily).

Entertainment expenses include tickets and entrance fees to an entertainment or sporting event, gratuities, cover charges, and room rentals such as for hospitality suites. For more information, see Interpretation Bulletin IT-518, Food, Beverages, and Entertainment Expenses.
Long-haul truck drivers
Expenses for food and beverages consumed by a long-haul truck driver during an eligible travel period are deductible at 80%.
An eligible travel period is a period of at least 24 continuous hours throughout which the driver is away from the municipality and metropolitan area that he or she resides in (the residential location) and is driving a long-haul truck that transports goods to, or from a location that is beyond a radius of at least 160 kilometers from the residential location.
Extra food and beverages consumed by self-employed
This information is for self-employed: 

• on foot
• bicycle couriers
• rickshaw drivers

They can deduct the cost of the extra food and beverages they must consume in a normal working day (8 hours) because of the nature of their work.
The daily flat rate that can be claimed is $17.50.
If you are claiming this deduction you should be prepared to provide log books showing the days worked and the hours worked on each of these days during the tax year. The CRA may also ask for dispatch slips or other documents to support the days worked during the tax year.
By using this flat rate deduction, you will not be required to maintain or submit receipts for the extra meal and beverage consumed.
If you want to claim more than the flat-rate amount, the Canada Revenue Agency will also need:

• supporting receipts for all food and beverages claimed
• something that clearly shows the extra amount of food and beverages required because of the nature of your work, and how this amount exceeds what the average person would consume both in terms of cost and quantity

Prepaid expenses
A prepaid expense is an expense you pay ahead of time. Under the accrual method of accounting, claim any expense you prepay in the year or years in which you get the related benefit.
Example
Suppose your fiscal year-end is December 31, 2016. On June 30, 2016, you prepay the rent on your store for a full year (July 1, 2016, to June 30, 2017). You can only deduct one-half of this rent as an expense in 2016. You deduct the other half as an expense in 2017.
For more information, see Interpretation Bulletin IT-417, Prepaid Expenses and Deferred Charges.
Property taxes
You can deduct property taxes you incurred for property used in your business. For example, you can deduct property taxes for the land and building where your business is situated.
The property tax related to business use of work space in your home has to be claimed as business-use-of-home expenses.
Office expenses
You can deduct the cost of office expenses. These include small items such as:

• pens
• pencils
• paper clips
• stationery
• stamps

Office expenses do not include items such as:

• calculators
• filing cabinets
• chairs
• desks

These are capital items.
Rent
You can deduct rent incurred for property used in your business.For example, you can deduct rent for the land and building where your business is situated.
The rent expense related to business use of work space in your home has to be claimed as business-use-of-home expenses.
Salaries, wages, and benefits (including employer's contributions)
You can deduct gross salaries and other benefits you pay to employees.
Do not include:

• salaries and wages such as direct wage costs or subcontracts
• drawings of the owner(s) of the business
• salaries or drawings of the owner(s) of the business since salaries or drawings paid or payable to you or your partners are not deductible

The Canada Pension Plan (CPP) is for all workers, including the self-employed. Employers, employees and most self-employed individuals must contribute to the CPP. The CPP can provide basic benefits when you retire or if you become disabled. When you die, the CPP can provide benefits to your surviving spouse/common-law partner and your dependent children under 25. For more information on contribution and benefits, go to Service Canada.
Quebec workers including the self-employed are covered under the Quebec Pension Plan (QPP).
As the employer, you can deduct your part of the following amounts payable on employees' remuneration:

• CPP or QPP contributions
• Employment insurance (EI) premiums
• Provincial parental insurance plan premiums (an income replacement plan for residents of Quebec - go to Revenu Québec for details)
• Workers' Compensation amounts for your employees

You report each salary by the end of February on a T4 slip, Statement of Remuneration Paid, or T4A slip, Statement of Pension, Retirement, Annuity and Other Income.
You can also deduct any premiums you pay for an employee for a sickness, an accident, a disability, or an income insurance plan. For more information on these slips, see the T4001, Employer's Guide - Payroll Deductions and Remittances, and go to Payroll
You can deduct the salary you pay to your child, as long as you meet all these conditions:

• you pay the salary
• the work your child does is necessary for earning business or professional income
• the salary is reasonable when you consider your child's age, and the amount you pay is what you would pay someone else

Keep documents to support the salary you pay your child. If you pay your child by cheque, keep the cancelled cheque. If you pay cash, have the child sign a receipt.
Instead of cash, you can pay your child with a product from your business. When you do this, claim the value of the product as an expense and add to your gross sales an amount equal to the value of the product. Your child has to include the value of the product in his or her income.
You can also deduct the salary you pay to your spouse or common-law partner. When you pay your spouse or common-law partner a salary, use the same rules that apply to paying your child.
Report the salaries you pay to your children and spouse or common-law partner on T4 slips, the same as you would for other employees. However, you cannot claim as an expense the value of board and lodging you provide to your dependent children and your spouse or common-law partner.
For more information on these slips, see the T4001, Employer's Guide - Payroll Deductions and Remittances.
Supplies
You can deduct the cost of items the business used indirectly to provide goods or services (for example, drugs and medication used in a veterinary operation, or cleaning supplies used by a plumber).
Telephone and utilities
You can deduct expenses for telephone and utilities, such as gas, oil, electricity, and water, if you incurred the expenses to earn income.
The expenses for utilities that are related to business use of work space in your home have to be claimed as business-use-of-home expenses.
Travel
You can deduct travel expenses you incur to earn business and professional income. Travel expenses include:

• public transportation fares
• hotel accommodations
• meals

In most cases, the 50% limit applies to the cost of meals, beverages, and entertainment when you travel. For more information, go to Meals and entertainment (allowable part only).
The 50% limit also applies to the cost of food and beverages served and entertainment enjoyed when you travel on an airplane, train, or bus, when the ticket price does not include such amounts.

1. Equivalent-To-Spouse CreditThe equivalent-to-spouse credit can be claimed if you are single, divorced or separated. It is calculated the same way as the spousal credit with some restrictions. 

• If the dependent is not a child, he or she must be a Canadian resident. If a child is claimed as a dependent, he or she must have been under 18 years of age at least in part of the tax year, unless the child is mentally or physically infirm.
• Only one dependent can be claimed under the equivalent-to-spouse credit.
• Only one claimant is entitled to credit with respect to any particular dependent.
  • The credit cannot be claimed in cases where the taxpayer is subject to court-ordered support obligation.

To be eligible, it is not necessary that the dependant have lived with or been supported by the taxpayer for the entire year.
2. Charitable DonationsThe CRA allows a federal tax credit on charitable donations of 15% for the 1st $200 and 29% on amounts over $200 up to a maximum of 75% of net income. The provincial tax credit for Ontario residents is 6.05 per cent of the first $200 and 11.16 per cent of any amount over $200.
Spouses can pool their contributions to maximize the tax break. Furthermore, contributions need not be claimed in the tax year they were made, but can be carried forward for up to five years. Donations under the $200 limit can be accumulated and claimed in later years to qualify for the higher credit allowance.
3. Childcare ExpensesChildcare expenses are deductible from income where both spouses, or spouse, in the case of single parent families, are working or where one spouse is attending school for all or part of the tax year. Childcare expenses can include daycare fees, boarding school, hockey school, or summer camp fees.
If both spouses are working, the lower-income earner must claim the deductions. If the lower income earner is a full-time student, the deduction is available to the higher earner for the number of weeks the spouse attends school.
The maximum you’re allowed to claim under the childcare deduction is $7,000 for each child under seven at the end of the year, and $4,000 for each child over seven and under 16. For children with disabilities, you can deduct up to $10,000 starting in year 2000. The deductions cannot exceed two-thirds of your earned income.
4. Medical ExpensesNon-reimbursed medical expenses can be claimed as a non-refundable tax credit. The federal portion of this credit consists of 16 per cent of expenses in excess of the lesser of: $1,755 or three per cent of the individual’s net income for the year. The Ontario provincial portion of the medical expense credit is calculated at 6.05 per cent of expenses in excess of the lesser of $1,770 or three per cent of the individual’s net income for the year.
Medical expenses may also be claimed for dependants other than a spouse or common-law partner, but the total expenses claimed must be reduced by 4.25 times the dependant’s income in excess of $7,756. In Ontario, when medical expenses are claimed for such dependants, the total allowed is reduced by 25.7 per cent of the dependant’s income in excess of $7,817.
The expenses eligible for the medical expense credit are quite lengthy. Refer to IT519R2 or other CRA publications for a complete list. Some of these are:

• Attendant care for the disabled -up to two-thirds of earned income with no maximum;
• Full-time attendant care for individuals with severe and prolonged mental or physical infirmities, no maximum;
• Cost of supervision of an individual eligible for the disability tax credit who is residing in a Canadian group home devoted to the care of people with a severe and prolonged impairment;
• Part-time attendant care - to a maximum of $10,000 federally ($10,810 for the Ontario portion of this credit), increasing to $20,000 ($21,620 in Ontario) if the individual died during the year;
• 50 per cent of the cost of an air conditioner in the case of severe respiratory ailment, to a maximum of $1,000;
• 20 per cent of the cost of a van required for an individual confined to a wheelchair, to a maximum of $5,000 ($5,405 in Ontario);
• Expenses incurred in moving to accessible housing, to a maximum of $2,000 ($2,162 in Ontario);
• Expenses incurred in renovating or adapting a home to provide the patient with added mobility;
• Medical devices to assist with impaired seeing or hearing;
• Tutoring services for individuals with a certified learning or mental impairment;

• A portion of expenses for the construction of a new residence required for a disabled individual to gain access to, or be mobile or functional within that home;
• Expenses for driveway alterations to enable a mobility-impaired individual to access a vehicle;
• Reasonable travel expenses incurred to obtain medical services outside of the vicinity of an individual’s home, to the extent these have not been reimbursed by a provincial health plan, or other source.

Married or common-law couples are allowed to pool their claims together. Taxpayers claiming medical expenses should be sure to include all receipts with their returns. You can deduct the premiums you paid for medical coverage, including Blue Cross or Green Shield private coverage and amounts deducted for employer plans. Your employer can give you a statement of what you paid for your medical plan.
The CRA allows you to load up your claims for any 12-month period ending in the year of the tax return. This means you can choose the period that will result in the highest yield for you. This applies to expenses like eyeglasses and certain dental work. If you accumulate your claims within the same 12-month period you can maximize the tax benefit of the credit.
5. Dividend IncomeThe effect of the dividend tax credit is to reduce dividend income at the highest marginal rate to 14% to 17% lower than the highest marginal rate for ordinary income. Because of the way the dividend tax credit works, it may be beneficial for couples with dividend income to take advantage of tax rules that allow the lower-earner to transfer dividend income to his or her higher-earning spouse.
6. Disability CreditsA federal tax credit of 16 per cent on $6,279, or $1,005, is available for taxpayers with severe and prolonged mental or physical infirmity. To qualify, a Canadian medical doctor must certify to the impairment on Form T2201. The Ontario provincial portion of this credit is 6.05 per cent on $6,637, or $402. Professionals other than a doctor may attest to the disability. An optometrist can verify sight impairment or an audiologist can certify an individual’s hearing loss. A taxpayer’s physical or mental disability can be confirmed by respectively, an occupational therapist or psychologist.
The impairment is considered severe if it restricts the person in their daily living activities. If such things as walking, speaking, feeding or dressing oneself, for example are affected for a continuous period of at least 12 months, then the infirmity satisfies the purposes of the tax credit.
The disability tax credit extends to individuals for whom a medical doctor has prescribed therapy at least three times a week or an average of at least 14 hours, as treatment for a disability of a basic activity of their daily living.
A DTC supplement of up to $587 (16 per cent of $3,663) is also available for caregivers of children under 18 who have severe disabilities that require full-time home care. Annual child-care and attendant care expenses in excess of $2,145 will offset this supplement, eliminating it altogether when expenses reach $5,808.
In the 2003 federal budget, a new Child Disability Benefit (CDB) was introduced for the benefit of parents whose children qualify for the disability tax credit. This annual benefit will provide up to $1,600 for families with a net income less than $33,487. When the net income of a family responsible for one disabled child reaches $46,602, the CDB will be phased out completely. The limit is higher where more disabled children are being cared for.
The caregiver tax credit reduces federal tax by up to $587 (16 per cent of $3,663) for taxpayers over 17 years of age who are providing in-home care of an infirm, dependent relative (including in-laws) who is at least 65 years of age. The maximum credit is reduced by 16 per cent of the dependant’s net income in excess of $12,509 and eliminated entirely when their income reaches $16,172.
The Ontario provincial tax credit allows a maximum of $402 (6.05 per cent of $6,637), which is reduced by 6.05 per cent of net income in excess of $13,050 and eliminated entirely when their income reaches $19,687). This credit is not available if the equivalent-to-spouse credit or infirm dependent credit has already been claimed.
7. Pension Income CreditIf you receive pension income, a 16 per cent federal tax credit and a 6.05 per cent Ontario provincial tax credit on up to $1,000 of eligible pension income is available. If the pension is from an employer’s plan, you are eligible regardless of age; otherwise, in the case of a RRSP or RRIF withdrawal or an annuity, you must be at least age 65. If you can’t use the credit, it can be transferred to your spouse.
8. Carrying ChargesThese include a variety of expenses associated with financing charges and investment expenses, such as:

• Interest on loans for investment purposes.
• Interest charged on the purchase of Canada Savings Bonds through your employer’s payroll deduction plans.
• Fees paid to financial plans and investment advisors.

9. Moving ExpensesIf you move within Canada, your moving expenses might be an allowable tax deductible. You must be employed, and your new location must be at least 40 kilometers closer to your place of work. Starting a business would qualify, as would moving away from home to take your first job. If the deductions are greater than earned income, they can be carried forward for one year to realize the full tax benefit.
Expenses that can be claimed include hiring movers or renting a van to move yourself, breaking a lease, furniture storage, meals and lodging for you and your family while traveling and legal fees and real estate commissions if you have to sell your home.
10. Self-employment ExpensesIf you are using your house as part of your business - a home office for example - you can claim a deduction for that part of the home that is used to conduct business activities. If you are a homeowner you can claim a portion of your mortgage interest, property taxes and capital cost allowance. If you are a renter you can claim a portion of your monthly rent. You can include in your deduction a share of the utilities, insurance or home maintenance allotted to the area of the house set aside for business use. For each of these expenses you can claim a percentage equal to the percentage of your home that is reserved for business.
You can’t use these items to create a loss that could be deducted against other sources of income, however. Of course, any expenses solely related to the business, such as supplies, travel and client entertainment, are fully deductible. CRA forms T2124 and T2032 contain a guide entitled "Calculation of Business-Use-of-Home Expenses" that will help you calculate your allowable claim.

Among the factors to consider are the benefits of incorporating and the implications that incorporation can have for your business.
If you decide to incorporate, you will then have to choose between federal incorporation and provincial or territorial incorporation. Even if you are not ready to incorporate at this time, the factors affecting this decision can change over time.


Benefits of incorporatingNo matter where you choose to incorporate, incorporation offers many benefits to your company, including:

• creation of a separate legal entity
• limited liability
• lower corporate tax rates
• better access to capital and grants
• continuous existence.

Separate legal entityThe act of incorporating creates a new legal entity called a corporation, commonly referred to as a “company”. Your corporation will have the same rights and obligations under Canadian law as a natural person. Among other things, this means that it can acquire assets, obtain a loan, enter into contracts, sue or be sued, and even be found guilty of committing a crime. Your corporation's money and other assets belong to the corporation and not to its shareholders.
Limited liabilityIncorporation limits the liability of a corporation's shareholders. This means that, as a general rule, the shareholders of a corporation are not responsible for its debts. If your corporation goes bankrupt, your shareholders will not lose more than their investment (except shareholders who have provided personal guarantees for the corporation's debts). Creditors also cannot sue your shareholders for the corporation’s liabilities (debts), even though the shareholders are the owners of your corporation.
However, if a shareholder has another relationship with the corporation (for ex., as a director), there are circumstances when this person can be liable for the debts of the corporation. In other words, the person would not be liable for the corporation’s debts as a shareholder, but as a director. Under the CBCA, directors have a number of duties and liabilities (see Duties and liabilities of directors and officers). For example, it says that directors can be held liable for certain acts or for failure to act.
Lower corporate tax ratesCorporations are taxed separately from their owners. Because the corporate tax rate is generally lower than the individual tax rate, incorporation can offer you some fiscal advantages. Consider consulting a lawyer or an accountant to help you assess whether incorporating might save you money. In fact, your accountant will likely recommend incorporation once your revenues reach a certain point.
​Better access to capital and grantsRaising money is often easier for corporations than it is for other forms of business. For example, your corporation would have the option of issuing bonds or share certificates to investors. Other types of businesses must rely solely on their own money and loans for capital. This can limit the ability of your business to expand.
Corporations are also often able to borrow money at lower rates than the rates offered to other types of businesses. Financial institutions and others tend to see loans to corporations as less risky than those given to businesses that are not incorporated.
Continuous existenceYour corporation would continue to exist even if every shareholder and director were to die. In these circumstances, ownership of the corporation would simply transfer to the shareholders' heirs. This is not the case for partnerships or sole proprietorships, which cease to exist on the death of their owners.
This greater stability would allow your corporation to plan over a longer term. It also helps in obtaining more favourable financing.

You can deduct expenses for the business use of a work space in your home, as long as you meet one of the following conditions:

• it is your principal place of business; or
• you use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.

You can deduct part of your maintenance costs such as heat, home insurance, electricity, and cleaning materials. You can also deduct part of your property taxes, mortgage interest, and CCA. To calculate the part you can deduct, use a reasonable basis such as the area of the work space divided by the total area of your home.

If you use part of your home for both your business and personal living, calculate how many hours in the day you use the rooms for your business, and then divide that amount by 24 hours. Multiply the result by the business part of your total home expenses. This will give you the household cost you can deduct. If you run the business for only part of the week or year, reduce your claim accordingly. For more information, see Interpretation Bulletin IT-514, Work Space in Home Expenses.
The capital gain and recapture rules will apply if you deduct capital cost allowance on the business use part of your home and you later sell your home. For more information about these rules, go to Line 9936 - Capital cost allowance (CCA).

If you rent your home, you can deduct the part of the rent and any expenses you incur that relate to the workspace.

The amount you can deduct for business use of home expenses cannot be more than your net income from the business before you deduct these expenses. In other words, you cannot use these expenses to increase or create a business loss.

You can deduct the lesser of the following amounts:

• any amount you carried forward from the previous year, plus the business use of home expenses you incur in the current year; or
• the amount on line Q of Form T2125, Statement of Business or Professional Activities.

In your next fiscal period, you can use any expense you could not deduct in the current year, as long as you meet one of the two previous conditions. You also use the same rules.

To calculate your business-use-of-home expenses, complete the "Calculation of business-use-of home expenses" chart on Form T2125. For an example of the calculation of these expenses, go to Calculating business-use-of home expenses. Enter on line 9945 your share of the amount from line 3 in the chart. The expenses you claim on this line cannot have been claimed elsewhere on Form T2125.

Here are the most common tax deductions taken by real estate pros:
1. Car Deductions: The single most claimed tax deduction for all small businesses is car and truck expenses. The cost of all driving you do for your real estate business, with the important exception of commuting to and from your home to work, is tax deductible. If you like recordkeeping, you can keep track of all your car expenses to figure your annual deduction. But, if you’d rather not keep track of how much you spend for gas, oil, repairs, car washes, and so forth, you can use the standard mileage rate. (Check the IRS website for current annual rates.) When you use the standard rate, you only need to keep track of how many miles you drive for business, not how much you spend on your car.
2. Office Expenses: The amounts you spend on your business office are deductible business expenses. For example, you may deduct the rent and utilities you spend for an office. But, if you work at home, you may be able to deduct the cost of your home office. This deduction is particularly valuable if you are a renter because it enables you to deduct a portion of your monthly rent, a sizable expense that is ordinarily not deductible.
3. Business Travel: You may also deduct your expenses when you go out of town for your real estate business. These include airfare or other transportation costs and hotel or other lodging expenses. But, you may only deduct 50% of the cost of meals when you travel on business. If you plan things right, you can even mix pleasure and business and still get a deduction.
4. Meals and Entertainment: The days of the deductible three-martini lunch are pretty much at an end. To deduct the cost of a meal in a restaurant or an entertainment event like a baseball game or theater visit, you must have a serious business discussion before, during, or soon after the event. Moreover, you may only deduct 50% of your business meal and entertainment costs.
5. Depreciation: When you buy property for your business that will last more than one year, you may deduct the cost a little at a time over a period of years. This process is called depreciation. Examples of depreciable property include cars, computers, and office furniture. However, you don’t always have to depreciate long-term business property. Small businesses have the option of deducting the entire cost of such property in a single year under Internal Revenue Code Section 179 or using bonus depreciation. This enables you to get a big deduction in a single year rather than spreading it out over several years. 
6. Supplies: Supplies are business items that you use up in less than one year. They include everything from paperclips to postage stamps.
7. Legal and Professional Services: You can deduct fees that you pay to attorneys, accountants, consultants, and other professionals if the fees are paid for work related to your business.
8. Insurance: Insurance you buy just for your business is deductible—for example, business liability insurance or insurance for business property. If you have a home office, you may deduct a portion of your homeowners insurance. Self-employed people are also allowed to deduct 100% of their health insurance premiums from their income taxes.
9. Commission Rebates: With real estate prices rising in Canada, customers who are either buying or selling regularly ask their agent for a break on their commission so as to aid in closing costs, likely renovations, or to decrease their mortgage balance after closing. These commission rebates are 100% deductible to the agent.



Here’s a checklist of common expenses for real estate agents and brokers that you can use to make sure you don’t miss any deductions:

• Advertising expenses, including websites, mailing lists, newspaper advertising, fliers, online advertising, postcards, promotional materials, and anything else you pay for to market your real estate business.
• Bookkeeping, accounting and legal fees.
• Business meals and entertainment (only 50 percent deductible).
• Cab fares for business travel.
• Car and truck expenses, including business mileage, depreciation, insurance, interest on car loans, lease payments, license plate fees, parking expenses, and tolls.
• Cell phones.
• Computer software.
• Computers.
• Desk fees.
• Education to maintain or improve required skills.
• Home office expenses (if you qualify).
• Insurance.
• Interest, such as interest for business loans, interest paid on business credit cards.
• Internet access fees.
• Office equipment.
• Office expenses, including rent, cleaning and maintenance, and utilities.
• Office supplies.
• Postage.
• Professional dues and subscriptions.
• Subscriptions to professional journals.
• Taxes, including payroll taxes for employees, state and local business taxes.
• Telephone service fees.
• Travel to business conventions, including transportation, lodging and food.
• Wages and benefits paid to employees.