Dateline: 02/08/09
One of the economic stimulus measures included in the 2009 federal budget is a temporary Home Renovation Tax Credit (HRTC) designed to encourage investment in Canadian housing.
Timing of Home Renovation Tax Credit
The Home Renovation Tax Credit applies to home renovation expenditures made between January 27, 2009 and February 1, 2010, based on agreements entered into after January 27, 2009.
Value of Home Renovation Tax Credit
A tax credit of 15 percent can be claimed on the part of home renovation expenditures over $1000 and under $10,000. That means there is a $1000 deductible, and the maximum tax credit is $1350.
Who is Eligible for the Tax Credit
Eligibility for the home renovation tax credit is based on the family. For the purpose of this tax credit, a family is generally considered to consist of an individual, and an individual’s spouse or common-law partner.
Family members can share the tax credit.
Home Renovations Eligible for the Tax Credit
The tax credit can be claimed for renovations and "enduring alterations" to an individual’s dwellings or the land on which they sit. Eligible dwellings include houses, cottages and condominium units owned for personal use.
Related expenses such as building permits, professional services and equipment rentals are also eligible for the tax credit.
Examples of projects that are eligible:
- Renovating a kitchen, bathroom or basement
- Laying new carpeting
- Putting in new hardwood floors
- Building a deck
- Painting the inside or outside of a house
- Resurfacing a driveway
- Installing a new furnace or water heater
- Laying new sod
Home Renovations Not Eligible for the Tax Credit
Routine repairs and maintenance will not qualify for the tax credit.
Examples of purchases that do not qulaify for the tax credit
- furniture
- appliances
- construction equipment
- tools
- carpet cleaning
- maintenance contracts (furnace cleaning or lawn care, for example)
How to Claim the Home Renovation Tax Credit
The tax credit is claimed when filing your Canadian income tax return for the 2009 tax year.
