Home Renovation Tax Credit - What You Need To Know

The new Home Renovation Tax Credit (HRTC) introduced in the 2009 Federal budget means that if you've been planning on renovating your home, this is a good year do it. For eligible home renovation expenditures made after January 27, 2009 and before February 1, 2010, families will be able to claim a 15% non-refundable tax credit for certain amounts paid to renovate their residence.

This non-refundable tax credit will be available for this period for families completing renovations to their personal residence, which may include a cottage as well as the taxpayer's principal residence. Eligible expenditures include the cost of labour, building materials, fixtures, equipment rental, and permits. The cost of financing the renovations will not be eligible. Renovation costs do not include regular repair expenses, costs of audio-visual equipment or items that have value independent of the home, such as furniture, draperies and construction equipment.

Some examples of eligible expenses are:

• Renovating bathroom, kitchen or basements
• New bathroom floors
• New carpets
• Building an addition, deck or retaining wall
• New furnace or hot water heater
• Interior or exterior painting
• Driveway resurfacing
• New sod

Ineligible expenses would include:

• Contracts regarding maintenance (i.e. snow removal, furnace cleaning, lawn care)
• Purchase of furniture and appliances

The credit will apply to the costs of renovations in excess of $1,000 to a maximum cost of $10,000. The maximum credit is thus $1,350 ($9,000 x 15%). The maximum credit applies to all renovations (renovations made to more than one residence may be pooled for claiming the credit). The credit will not be reduced by grants received through the ecoENERGY Retrofit program related to the renovation or by claiming the renovation expenses as a medical expense if they so qualify.