How to take advantage of the Home Renovation Tax Credit
Part of “Canada’s Economic Action Plan” includes a Home Renovation Tax Credit that could help you save up to $1,350 on eligible home improvements when goods are purchased or professional services are performed after January 27, 2009 and before February 1, 2010.
The Home Renovation Tax Credit is a federal non-refundable tax credit based on eligible expenses for improvements to your house, condominium, or cottage. The 15% tax credit applies to eligible expenses that exceed $1,000, but not more than $10,000. For instance, if you installed new windows at a cost of $5,000 and new shingles at a cost of $5,000 your tax credit is calculated as follows. ($10,000 – $1,000) x 15% = $1,350 tax credit.
You must get your contracts in writing, keep your receipts and claim the credit on your 2009 tax return.
Eligible expenses must be of an enduring nature and integral to your property.
Examples of eligible expenses
Renovation of a bathroom, basement, or kitchen
New windows, doors, or flooring
Building an addition, garage, deck, shed or fence
A new furnace, fireplace, water softener, or water heater
A new driveway, or a new surface on an existing driveway
Re-shingling a roof, or painting a house
Landscaping projects like new sod, perennial shrubs and flowers, trees, etc.
Swimming pools (permanent – in-ground and above ground)
Fixtures – blinds, shades, shutters, awnings, lights, fans, etc.
Associated renovation costs such as permits, professional services, equipment rentals, etc.
Examples of non-eligible expenses
Improvements made to rental units even if located with your primary residence
Furniture, appliances, tools
Audio and visual electronics
Routine repairs, maintenance and cleaning costs
Financing costs
For more information on the Home Renovation Tax Credit click here.
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Royal LePage Saskatoon Real Estate
5 comments so far. We'd love to hear your thoughts.
September 30th, 2009 at 8:04 AM
Great article. Great information, I am glad to see that it finally passed through the house and that people can now count on recieving this credit!
Happy Selling!
September 30th, 2009 at 12:17 PM
Hey Norm! Figured I’d pop in.
I’m hoping to take advantage of the tax credit to fix up my bathroom.
Sadly, I sometimes have to ask myself if it really is in fact helping me *right now*. Tax incentives do little to help the people who need it the most.
I guess it’s just credit I’ll file away for another future year.
September 30th, 2009 at 2:14 PM
Glynn,
Technically, I don’t think it has “passed through the house” but the government is promoting it as a done deal.
Alex,
Nice to see you again. Hope all is well with you.
This “tax credit” is only good until February 1 of 2010. Hope you can manage to get it done, though time is probably getting short to hire someone to do it.
October 1st, 2009 at 10:25 AM
Hi Norm
I haven’t posted much in the past but have been following your blog as closely as possible for over a year now. There is quite a lot of very useful information from you and from both sides, “boomers” and “gloomers”
Now I have a question about this Home Renovation Tax Credit. It is easy to figure out when you already own the place, but does it apply if you buy conversion condo that was renovated (new energy efficient windows, new flooring, bathroom, kitchen) by developer and sold to me. I am still paying for renovations as condo would have been cheaper if condo was purchased as is and renovations done by new owner, in this case me ?
Thanks for all your work and please keep it up.
October 1st, 2009 at 11:06 AM
DobDob,
Of course, if were up to me, the cheque would be in the mail.
You make an excellent point, but I’m going to guess that the tax man says, “No way!” The flip side argument would be that the developer was able to write those expenses off against the revenue from the project, thereby reducing costs for you, the end user. I can’t see the same receipts qualifying for two credits (or deductions) but it would certainly be worth bouncing off of an accountant.
Thanks for reading. I appreciate the kind feedback and your comment.
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