Canadians Could be Eligible for Tax Rebate on Home Renovations

Individuals who have had work done on their homes may be able to save up to $1,350 on home improvements purchased before February 1, 2010.

According to the Canadian Revenue Agency (CRA), the Home Renovation Tax Credit (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 or the land that forms part of the eligible dwelling. The cost of routine repairs, maintenance and expenditures not integral to the dwelling are not eligible.

To understand eligible versus ineligible expenditures, the CRA offers this example list.

Eligible expenses

* 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 or painting of a house

* Landscaping -- 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 costs such as permits, professional services, equipment rentals, and incidental expenses

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

The HRTC is calculated in a specific way: The 15 percent 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 is $1,350. 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.

The CRA advises that while supporting documents for home improvement purchases do not need to be submitted with your tax return, they should be available should the agency request them at a later time. Therefore, to avoid problems with an HRTC claim, be sure that you have records and receipts for all goods or services you plan to claim.

Information provided courtesy of the Canadian Revenue Agency. To learn more, visit www.cra.gc.ca/hrtc.

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