Home Renovation Tax Credit

Claiming Your Home Renovation Tax Credit for 2009

What is the HRTC?

If you have made improvements on your house, condo, or cottage during 2009, you might be eligible for the Home Renovation Tax Credit.  Purchases must be made after January 27, 2009 and before February 1, 2010 to be claimed.  Expenses are eligible if they fall in the $1,000 to $10,000 price range giving you a maximum non-refundable tax credit of $1,350.

Can I Claim the HRTC?

Who is eligible for the HRTC?

Each family is eligible to receive one non-refundable credit.  A family is considered to be the homeowner and their spouse or common-law partner and their children that are under the age of 18 during the 2009-year.  The credit can be split among the different family members up to the maximum amount allowed.

If more than one family lives in a dwelling and shares ownership of that dwelling, each family can claim the credit, each up to $1,350. 

Make sure you have all receipts and accepted documentation of any work that is completed on the eligible dwelling.

What expenses are eligible?

Eligible expenses are those made to an eligible dwelling during 2009.  The must be renovations or alterations made to the actual dwelling or land attached to an eligible dwelling and are not meant to be temporary in nature.  If the items purchased are not meant to become a permanent part of the dwelling, they most likely will not be eligible for the tax credit.  A list of included and excluded items can be found at http://www.cra-arc.gc.ca/hrtc.

If the person doing the renovations is registered for the Goods and Services Tax/Harmonized Sales Tax under the Excise Tax Act their expense is eligible for the credit.  This includes any work completed by an electrician, carpenter, plumber, architect or other outside contractor.  If the person is someone related to you, and is registered for the GST/HST, their expense is eligible if they meet all the conditions.

Is my dwelling eligible?

If the housing unit is your principle residence of one or more of your family members, then the dwelling is eligible.  Occupancy must occur between January 27, 2009 and February 1, 2010 to qualify.  As long as you own the dwelling and use it personally, your house and cottage will qualify.  However, there is still the maximum of $10,000 per family that can be claimed per family.  This includes eligible expenses that are incurred for both residences.

If you make renovations or alterations to a dwelling that you use as a rental or as a place of business, you make claim the credit only for expenses that are used to renovate or alter the personal-use areas.  If it is a large project, such as re-shingling the roof, then the expenses must be divided between the personal and business areas.

Living in a condo or co-operative house allows you to claim the credit for your share of the cost to any common areas.

When do these renovations or alterations have to be started and completed?

Only expenses that occur for work that is performed by an outside contractor or for acquired goods during the January 27, 2009 and February 1, 2010 are eligible for the credit.

How do I claim my HRTC?

On your personal income tax return, a new line and schedule will allow you to calculate and claim your HRTC.  There is no need to include any documentation, but keep it incase you are asked to produce it at a later date.

What items to I need to support my claim?

Agreements, invoices, and receipts that clearly show what work was completed on the dwelling should be kept as your documentation.  They should clearly show who did the work, if an outside contractor or vendor competed the work, their address and GST/HST registration number, a list of goods purchased and the date they were purchased.  If purchased items were delivered to the worksite, the delivery slip needs to be dated as the date of delivery.  A description of the renovation or alteration that includes the address of where the work was performed and the dates of when it was started and completed, along with the amount of the invoice and proof that payment was made, which can include the statement as being marked paid, credit card slips, or cancelled cheques.

What if this qualifies for a different tax credit, grant, or incentive?

The HRTC can be claimed and is not reduced if the expense is eligible for both the HRTC and the other program that it might be entitled to.  This includes any expenses that might also qualify for the Medical Expense Tax Credit (METC).

How to calculate the HRTC?

Eligible expenses that occur between January 27, 2009 and February 1, 2010 can be claimed for the HRTC.  To calculate the amount you will receive as credit for the 2009 tax year, add all eligible expenses together, subtract the base minimum of $1,000, and multiple by 15%.

If you spend $4,000 on a new deck, $3,500 on a new roof, and repaint your kitchen and dining room for $250, your credit would be calculated like so:

$4,000 + $3,500 + $250 = $7,750 in Total eligible expenses

$7,750-$1,000 = $6,750

as the Maximum allowable home renovation expense

$6,750 x 15% = $1012.50 Maximum HRTC

A home renovation worksheet is available to help you keep track of any expenses that you have during the 2009 tax year.  As long as you have proper documentation, then you can claim the expense on the worksheet.  Anything that does not have an invoice cannot be claimed.  Also check that things such as tools and any service that does not result in a permanent alteration is not included, as these are excluded items.  Either you or your spouse or common-law partner can claim the credit, as long as it does not exceed the maximum amount ($450 as in the case of the new deck).

Making sure you have the appropriate documentation and that is for an eligible expense on an eligible dwelling will allow you to claim credit without a problem.  Also make sure that it fits within the time frame of January 29, 2009 and February 1, 2010.