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In Alberta, closing costs are generally not tax deductible for most home buyers. However, there are some exceptions and specific circumstances where certain costs may be deductible or provide tax benefits. Here’s a breakdown:

  1. Legal Fees: If you incurred legal fees to purchase a rental property, these might be deductible against rental income. However, legal fees for purchasing a personal residence are not deductible.
  2. Mortgage Interest: The interest on a mortgage for a rental property can be deducted against rental income. For a primary residence, mortgage interest is generally not tax deductible in Alberta.
  3. Moving Expenses: If you move at least 40 kilometers closer to a new place of work, educational institution, or to start a new business, some moving expenses might be deductible. However, typical closing costs like legal fees or land transfer taxes do not fall under this category.
  4. Home Office Expenses: If part of your home is used for business purposes, a portion of the home-related expenses, including interest on mortgage, property taxes, and utility costs, may be deductible.

For most home buyers in Alberta purchasing a primary residence, the standard closing costs, such as legal fees, land transfer taxes, and inspection fees, are not tax deductible. It’s advisable to consult with a tax professional to understand the specific implications for your situation and to explore any available tax credits or deductions.

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