Canadian Home Renovation Tax Credit Information
Tax Credit for Home Improvements Offered by Government of Canada
The Canadian Government’s Home Renovation Tax Credit is a non-refundable tax credit that stimulates the economy by encouraging home owners to upgrade, renovate and improve their dwellings and property. This could help taxpayers save up to $1350.00 on their 2009 income tax return.
Who Can Claim the Canadian Home Renovation Tax Credit?
According to the Canadian Revenue Agency, (CRA), the Home Renovation Tax Credit is limited to one application per family. Their definition of family includes a spouse or common-law partner and children under 18 at the end of 2009.The site states that the claim can be divided among family members, but it may not exceed the maximum claim of $10,000.00 per family.
However, if two or more families share possession of an eligible dwelling, for example, partnership in a cottage, then each family can claim its own renovation tax credit of up to $10,000.00.
What Type of Dwelling is Eligible for the Home Renovation Tax Credit in Canada?
Any dwelling that is owned by and personally lived in by a family member at any time between Jan 27, 2009 and Feb 01, 2010 is eligible for the Canadian Home Renovation Tax Credit. Cottages are included, if they are used personally.
Certain expenses for rental properties may also qualify. See the Business and Professional Income Guide or Rental Income Guide on the CRA's website for details.
What Items Are Eligible for the Canadian Home Renovation Tax Credit?
According to the government of Canada’s website, improvements must be “of an enduring nature and integral to your property.”
Tax Credit Qualifying Interior Renovations and Improvements Include:
- Fireplaces and woodstoves
- Basement renovations
- Kitchen renovations, including kitchen counters, sinks, faucets, flooring
- Bathroom renovations, including bath tubs, shower stalls, sinks, faucets, toilets, flooring
- Ceiling fans and light fixtures
- Hot water tanks and furnaces
- Certain window treatments, such as blinds, shutters and shades
Eligible Exterior Home Renovations for Tax Credit in Canada
- New windows and doors
- Home additions
- Building a garage or shed
- A new driveway
Qualifying Improvements to Existing Exterior Structures
- Roof re-shingling
- House painting
- Driveway resurfacing
Tax Credit Eligible Landscape Improvements and Renovations
- Permanent in-ground or above-ground swimming pools
- New decks or fences
- Landscaping, including new sod, trees, shrubs
- Perennial plants
- Permanent water fountains or large garden ornaments
- Permanent garden lighting
Other Eligible Costs
Costs incurred during the as a result of the renovations and improvements, such as building permits, rental of equipment and professional services are also considered eligible expenses for the purpose of applying for the Home Reno tax credit.
Renovations and Improvements for Cottage Owners or Country Dwellers
- Wells
- Septic systems
- Permanent reverse-osmosis systems
- Water softeners
What Items Are Not Eligible for the Canada Home Renovation Tax Credit?
Certain items are not eligible for the tax credit. These generally include things that are not considered to be a permanent improvement to one’s property or that are perceived as maintenance and not improvements.
- Furniture
- Stereo, TV and audio-visual equipment
- Annual plants
- Yard and garden maintenance and grass cutting
- Furnace cleaning, servicing or repairs
- Snow removal
- House or pool cleaning services
- Certain draperies and curtains that could be removed and used elsewhere
What is the Time Frame for the Canadian Home Renovation Tax Credit?
All eligible work and purchases must be made between (but not including) January 27 2009 and February 01 2010.
How and Where Are the Tax Credits Claimed?
Tax credits for home renovations and improvements are claimed when filing one’s 2009 income tax return. Receipts are not submitted but must be retained in case the Canada Revenue Agency wishes to review them at a later date.
What Does Non-refundable Tax Credit Mean?
Non-refundable means the Home Renovation Tax Credit reduces one’s federal income tax. One will not receive a refund of the difference if the total of the Home Renovation Tax Credit is greater than federal income tax payable.
Resource Credits and Further Information:
This article was researched using Government of Canada websites and printed material.
As the list of eligible expenses is lengthy, visit the comprehensive and easy to navigate Canada Revenue Agency site which also has worksheets, calculations and FAQs or call 1-877-959-1 CRA (1-877-959-1272).
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