Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
On January 27th, 2009 Jim Flaherty, Federal Finance Minister announced the introduction of the Home Renovation Tax Credit. The non-refundable tax credit is calculated at 15% of eligible expenses over $1,000 to a maximum of $10,000. The maximum Home Renovation Tax Credit one could receive would be $1,350 e.g. $9,000 x 15%.
Only expenses incurred between January 27, 2009 and February 1st, 2010 will qualify for the credit. This tax credit will help many families reduce the overall cost of home renovations, however you must be aware of which expenses are eligible before claiming the credit for tax purposes.
Here are some examples of expenses that are eligible for the Home Renovation Tax Credit:
- Renovating a kitchen, bathroom or basement
- Windows, exterior and/or interior doors, garage door
- New carpet, hardwood floors or linoleum floors
- New furnace, boiler, heat pump, woodstove, fireplace, water softener, water heater, or oil tank
- Permanent home-ventilation systems
- Central air conditioner
- Permanent reverse osmosis systems
- Septic systems
- Electrical wiring in the home (e.g., changing from 100 amp to 200 amp service)
- Home security system (monthly fees do not qualify)
- Solar panels and solar panel trackers
- Painting the interior or exterior of a house
- Replacement of siding, eaves troughs, soffits and facia
- Re-shingling or replacing a roof
- Building an addition, garage, deck, dock, garden/storage shed, or fence
- A new driveway or resurfacing a driveway
- Exterior shutters and awnings
- Permanent swimming pools (in-ground and above ground)
- Permanent hot tub and installation costs
- Permanent sauna and installation costs
- Pool liners
- Solar heaters and heat pumps for pools (does not include solar blankets)
- Landscaping: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent irrigation systems, permanent water fountain, permanent ponds, large permanent garden ornaments
- Retaining wall
- Associated costs such as installation, permits, professional services, equipment rentals, and incidental expenses
- Fixtures1 – blinds, shades, shutters, lights, ceiling fans, etc.
Here are some examples of expenses that are NOT eligible for the Home renovation tax credit:
- Draperies and curtains
- Furniture and appliances
- Portable “plug-in” hot tubs
- Window or portable air conditioners
- Purchasing of tools
- Carpet cleaning
- House cleaning
- Maintenance contracts
- Snow removal and lawn care
- Financing costs
Some other important items to considering regarding Home Renovation Tax Credit Expenditures:
- Eligible Home Renovation Tax Credit expenses for other properties e.g cottages and second homes can be combined with expenses from ones principal property expenses to a maximum of $10,000.
- Only Canadian properties that are owned by the taxpayer and ordinarily inhabited can be claimed.
For additional information on the Home Renovation Tax Credit please visit the links below: