Take Advantage of the Home Renovation Tax Credit

In Budget 2009, our government released our Economic Action Plan for Canada. Part of this plan includes a new Home Renovation Tax Credit (HRTC). This temporary measure is designed to stimulate growth and encourage investment in improvements to the homes of Canadians. Once the budget passes Parliament, the HRTC will help Canadian homeowners make improvements to their homes while promoting economic activity.

Our government has made it very easy to take advantage of the HRTC. No application is necessary. Simply submit your renovation documentation with your 2009 income tax return. This will result in a tax credit of 15% on expenditures above $1,000 up to $10,000, to a maximum tax credit of $1,350 ($9000 x 15%).

To be eligible, expenditures incurred for a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling. Eligible expenditures can include the cost of labour, professional services, building materials, fixtures, rentals and permits. Eligible expenditures must occur after January 27, 2009 and before February 1, 2010 and be supported by acceptable documentation such as agreements, invoices, and receipts. This documentation must clearly identify the type and quantity of goods purchased or services provided, including the following information: 

• vendors/contractors name and business address and, their GST number;  

• a description of the goods and the date when the goods were purchased; 

• the date the goods were delivered (keep your delivery slip as proof); 

• a description of the work (including the address of where the work was performed) and the date the work was performed; 

• the amount of the invoice; and 

• proof of payment.

Examples of projects eligible for the HRTC include:  

• the renovation of a kitchen, bathroom, or basement; 

• the installation of new carpet or hardwood floors; 

• the construction of an addition, deck, fence or retaining wall; 

• the purchase of a new furnace or water heater; 

• painting of an interior or exterior of a house; and, 

• the resurfacing of a driveway or the laying of new sod.

Examples of projects ineligible for the HRTC include: 

• the purchase of furniture or appliances, such as refrigerators, stoves or sofas; 

• the purchase of tools and carpet cleaning; and, 

• maintenance contracts, such as furnace cleaning, snow removal, lawn care or pool cleaning.

More information about the HRTC can be found at:  www.cra-arc.gc.ca/gncy/bdgt/2009/fqhmrnvtn-eng.html

For an even bigger payback on your renovation, you may be able to combine the HRTC with grants from our government’s ecoENERGY retrofit program. You can find out more about the program at http://oee.nrcan.gc.ca/residential/personal/home-improvement.cfm?attr=4

If you wish to find out more about this new Home Renovation Tax Credit or any other government program, please contact us at chongm@parl.gc.ca or at (866) 878 5556.