The Home Renovation Tax Credit ("HRTC")
Benefit from a one-time savings of up to $1,350 on your 2009 tax return from basic home improvements purchased before February 1, 2010.
The significant features of the HRTC are:
- Amounts must be incurred after January 27, 2009, and before February 1, 2010
- Each family is entitled to one credit
- The 15% tax credit is on amounts more than $1,000 but less than $10,000
- All receipts must be kept but do not need to be submitted with your tax return
- Expenditures to replace items are eligible; expenditures to repair items are not eligible.
What is the HRTC?
Under proposed changes, the HRTC is a non-refundable tax credit based on eligible expenditures incurred for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, under an agreement entered into after January 27, 2009. The HRTC can be claimed when filing your 2009 tax return.
The HRTC can be claimed for renovations and alterations of an enduring nature and that are integral to the eligible dwelling (such as your home or cottage) or the land that forms part of the eligible dwelling. Any residence that your family owns and uses could qualify as an eligible dwelling.
Each family is entitled to one HRTC which can be split up amongst the family members in any manner chosen.
How is the HRTC calculated?
The 15% non-refundable tax credit can be claimed on eligible expenditures of more than $1,000 but not more than $10,000. The maximum tax credit that can be claimed to reduce your federal income tax is $1,350. However, if the total of your non-refundable tax credits is more than your federal income tax, you have no federal income tax to pay, and you will not receive a refund for the HRTC.
Certain expenditures may also be eligible for the ecoENERGY Retrofit – Homes grant. For more information about the ecoENERGY program, visit www.ecoaction.gc.ca.
Important things to remember
You do not have to submit your supporting documents with your income tax and benefit return; however, you must ensure this information is available should the Canada Revenue Agency ("CRA") request it.
To avoid problems with your HRTC claim, make sure you:
- get your contracts in writing;
- keep your receipts;
- summarize the expenditures; and
- submit the summary and receipts to your accountant.
Eligible expenses must be of an enduring nature and be integral to the eligible dwelling. The cost of routine repairs, maintenance, and expenditures not integral to the dwelling such as furniture and visual electronics are not eligible.
Examples of eligible expenses
- Painting the interior or exterior of a house
- Renovating a kitchen, bathroom, or basement
- New windows, doors, or flooring
- Building an addition, garage, deck, shed, or fence
- A new furnace, woodstove, fireplace, water softener, or water heater
- A new driveway or resurfacing a driveway, re-shingling a roof
- Landscaping – new sod, perennial shrubs and flowers, trees, etc.
- Fixtures – blinds, shades, shutters, awnings, lights, fans, etc.
- Associated costs such as permits, professional services, equipment rentals, and incidental expenses
Examples of non-eligible expenses
- Furniture, appliances, tools, and audio and visual electronics
- Routine repairs, maintenance and cleaning (e.g., furnace cleaning, snow removal, lawn care, pool cleaning, house cleaning)
- Financing costs
For more information, go to www.cra.gc.ca/hrtc or contact your SmytheRatcliffe advisor at 604-687-1231.
Current as of December 18, 2009