There’s a rumour floating around the internet that there is a tax credit available on individual tax returns for Canadians who have purchased original art created by a Canadian artist. I’ve even found blog posts that give specific details about this tax credit, but I couldn’t locate it on the CRA’s (Canadian Revenue Agency) list of deductions, credits and expenses page and none of these blog posts pointed to the source.
Well, I called the CRA so you don’t have to. Sadly there is no tax credit for individuals who purchased original art by a Canadian artist. Maybe there was at one point or we’re collectively experiencing the most boring Mandela effect, but as of February 20, 2024, there is no such tax incentive for individuals.
The good news is that if you’re a business, you can claim original Canadian art as Class 8 depreciable property. I’m going to try to break it down in a simple way, but as a disclaimer, I am a regular person and not an accountant. I wanted to pull this information together in a way that’s accessible to the general public.
Who can claim original art on their taxes?
Canadian businesses filing their taxes with the CRA who spent more than $200. Individuals can not claim original art on their taxes.
What types of art can you claim on your taxes?
Only original Canadian artwork is eligible for the tax credit. Prints or reproductions of paintings, while still beautiful, do not qualify. To be eligible, the artwork must be an original creation by a Canadian artist. This includes oil paintings, sculptures, drawings, and other forms of visual art that are unique creations by Canadian artists. Additionally, the artwork must be purchased from the artist directly or from a recognized art dealer.
How to claim art on your taxes?
It probably goes without saying, but keep your receipts! To claim your art on your taxes, you’ll need to keep records of your purchases, including receipts and any documentation showing that the artwork is original Canadian art. You can then include the total cost of your art purchases on your tax return.
What happens if I sell artwork purchased for my business later and the artwork appreciates?
The taxman seems to get you no matter what you do. Whether you claim your artwork purchase as depreciable property or not, you’ll still need to pay capital gains tax on the increase in value. Don’t let artwork appreciation deter you from claiming artwork business purchases as a depreciable asset.
Is it worth buying Canadian art for the tax credit?
Original artwork can add warmth and sophistication to lobbies, conference rooms, hallways and offices. If you’re a Canadian business and you’re planning on buying art because it aligns with your company vision and brand, I would say it’s worth considering Canadian art.
You can shop my original Canadian artwork here, or check out this blog on where to buy original paintings in the Greater Toronto Hamilton Area (GTHA) in 2024.
Let me know in the comments, what advice would you have for businesses considering buying original art.
