Home Renovation Tax Credit

 - by Leon Tsebro

Home renovation can be expensive and taxing; luckily, the government of Canada has created a non-refundable tax-credit for renovation called the Home Renovation Tax Credit, also known as HRTC. HRTC can be applied against the work and products used to renovate an eligible dwelling. An eligible dwelling is defined as a piece of property (house and land) that is owned by you (alone, with another person, or a share of capital stock), your partner (current or former spouse, current or former common-law), or (your, your spouse’s, your common law parner’s) children (under 18 years of age) at the time of the renovation or alteration.

Kitchen Renovation

Kitchen Renovation or Upgrade

This credit is granted if the renovation was performed between January 27, 2009 and February 1, 2010. This credit may be applied for the materials acquired in this period, even if they are installed after January 2010; you may also receive HRTC for the amount of services completed before February 1 2010. You may receive the credit if the agreement is accepted after January 28, 2009.

HRTC has a family based eligibility, meaning the family members, mentioned above. The claim can be split among family members, but the total amount cannot exceed the maximum allowable. If two or more families share the ownership, family can claim their own credit separately, calculated on its respective eligible expenses.

HRTC applies for expenses that are eligible expenses more than $1,000, but not more than $10,000. The maximum non-refundable tax credit is therefore $1,350 (($10,000-$1,000) x15%).

HRTC includes expenses including alternation or renovation of an eligible dwelling and the enduring nature and integral of the dwelling. As a rule of thumb, if the item purchased becomes a permanent part of your dwelling, it is eligible if it is accompanied by appropriate documentation.

bathroom reno

New Bathroom

Expenses such as furniture, electronics, appliances, entertainment devices, purchasing tools, house cleaning, carpet cleaning, financing costs, expenses to acquire goods previously used/leased by you or your family, expenses that are incurred with parts of dwelling that is used to generate income or maintenance expenses.

You may apply for HRTC through your tax return, in your Schedule 1. Do not attach receipts or documents supporting your claim, but do attach a new HRTC schedule to your paper return. Keep the documentation in case CRA asks for it to vertify your claim.

The documentation (agreements, invoices, receipts, must state the type and quantity of goods purchased or services provided including: the vendor/contractor (their business address and GST/HST registration number), description of goods and the purchase date, the date the goods are delivered/services were performed, the amount of invoice, proof of payment (receipts, invoices that say paid in full or accompanied by other proof of payment such as a credit card slip or cancelled cheque), and a statement from co-operative housing corporation/condominium corporation signed by authorized individuals.

Visit CRA’s Website for more details.