Canada's Home Renovation Tax Credit 2009

How Homeowners Can Qualify for the HRTC Federal Tax Credit Program

Sep 29, 2009

Canada's Home Renovation Tax Credit, or HRTC, is a non-refundable federal tax credit (for 2009 only) used by eligible cottage and home owners to reduce income tax.

Canadian homeowners can reduce their federal income tax for the 2009 tax year by submitting proof of eligible renovation expenses on work performed or goods acquired between January 27, 2009 and February 1, 2010. The following is an overview of who may qualify, eligible dwellings and expenses and how to use the 2009 HRTC.

Who Qualifies for the 2009 Home Renovation Tax Credit?

Each family can claim up to $10,000 in eligible expenses for a 2009 tax credit of up to $1,350. A family consists of a person and their spouse or common-law partner, and any children under 18 years of age at the end of 2009. Family members can split the tax credit on eligible dwellings (if a family owned a cottage and a house, for example); however, the maximum allowed per family is a $1,350 tax credit.

Landlords who rent part of their dwelling to businesses or private tenants may still qualify, but generally can only claim expenses on renovations to personal-use areas of the dwelling. Common area renovations or improvements may qualify; however, the expense must be divided between personal-use and income-earning portions of the dwelling using a formula provided by the Canada Revenue Agency.

How Does a Dwelling Qualify for the HRTC?

The Canada Revenue Agency (CRA) considers eligible any dwelling owned by, and used as the principal residence of, Canadian homeowners or one of their family members.

Cottages can qualify for the program when owned and personally used by the taxpayer or a family member. However, the $1,350 maximum still applies to the entire family. A taxpayer cannot claim $10,000 each for a home and cottage, but can split the tax credit between the two properties.

Which Expenses Can Canadian Homeowners Claim for this Federal Tax Credit?

In order for an expense to qualify, the agreement to purchase the good or service must be entered into after January 27, 2009. For example, a homeowner who contracted an electrician in December of 2008 to upgrade their wiring could not claim this expense even if the work was performed within the qualifying period.

Generally, any item that will not become a permanent part of the dwelling is not eligible. Cleaning services, lawn care, tools, furniture, and electronics are all excluded from the HRTC program.

The list of expenses eligible for the HRTC is extensive. Normally, services provided by plumbers, electricians, architects and other professionals are eligible for the federal tax credit. Some other examples of eligible expenses are:

This list is not exhaustive. Canadian homeowners are responsible for making sure their renovation plans qualify for the HRTC federal tax credit. Call the individual income tax enquiries call center at 1-877-959-1272 to speak with a CRA representative.

How to Find More Information on the Home Renovation Tax Credit

Visit the Canada Revenue Agency's Home Renovation Tax Credit information site for answers to frequently asked questions, worksheets for calculating the HRTC, and links to other federal tax credit resources.

The copyright of the article Canada's Home Renovation Tax Credit 2009 in Personal Tax Planning is owned by Miranda Miller. Permission to republish Canada's Home Renovation Tax Credit 2009 in print or online must be granted by the author in writing.