Home Renovation Tax Credit

Home renovations are smart investments in the long term value of a home and also create economic activity by increasing the demand for labour, building materials and other goods. Renovations can also reduce energy consumption and the long-term cost of owning a home.

To provide some $3 billion of much-needed fiscal stimulus and encourage investments in Canada’s housing stock, Budget 2009 proposes to implement a temporary Home Renovation Tax Credit (HRTC).

How the Home Renovation Tax Credit Works

The 15-per-cent credit may be claimed on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350.

The credit can be claimed on eligible expenditures incurred on one or more of an individual’s eligible dwellings. Properties eligible for the HRTC include houses, cottages and condominium units that are owned for personal use.

Renovation costs for projects such as finishing a basement, replacing windows and doors or re-modeling a kitchen are eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals and incidental expenses.

Routine repairs and maintenance do not qualify for the credit. Nor is the cost of purchasing furniture, appliances, audio-visual electronics or construction equipment.

How is the credit calculated?

The credit is available for the 2009 tax year and applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%). Primary Seal will double the eligible credit for up to $2700 in savings.

In order for the renovation to be an eligible expenditure documentation, such as agreements, invoices, and receipts, must clearly identify the type and quantity of goods purchased or services provided, including, but not limited to, the following information:

• information that clearly identifies the vendor/contractor, their business address and, if applicable, the GST/HST registration number;
• a description of the goods and the date when the goods were purchased;
• The date when the goods were delivered (keep your delivery slip as proof) and/or when the work or services were performed;
• A description of the work performed including the address where the work was performed;
• the amount of the invoice; and
• proof of payment. Receipts or invoices must indicate paid in full or be accompanied by other proof of payment, such as a credit card slip or cancelled cheque.

How to claim the HRTC

A new line will be incorporated in the 2009 personal income tax return to allow you to claim the credit.
For more information visit Department of Finance's Budget 2009 documents. For questions related to Budget 2009, call the Government of Canada toll-free information line at 1-800-622-6232.