The Home Renovation Tax Credit

The Home Renovation Tax Credit

Home renovations are smart investments in the long term value of a home and also create economic activity by increasing the demand for labour, building materials and other goods. Renovations can also reduce energy consumption and the longterm cost of owning a home.

To provide some $3 billion of much needed ﬁscal stimulus and encourage investments in Canada's housing stock, Budget 2009 proposes to implement a temporary Home Renovation Tax Credit (HRTC).

Temporary, Timely and Targeted Stimulus

The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. The temporary nature of the credit will provide an immediate incentive for Canadians to undertake new renovations or accelerate planned projects.

The HRTC can be claimed for renovations and enduring alterations to a dwelling, or the land on which it sits.

How will the HRTC Work?

The 15 percent credit may be claimed on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350.

BUDGET 2009

The credit can be claimed on eligible expenditures incurred
on one or more of an individual's eligible dwellings.
Properties eligible for the HRTC include houses, cottages
and condominium units that are owned for personal use.

Renovation costs for projects such as ﬁnishing a basement
or remodelling a kitchen will be eligible for the credit,
along with associated expenses such as building permits,
professional services, equipment rentals and
incidental expenses.

Routine repairs and maintenance will not qualify for the
credit. Nor will the cost of purchasing furniture, appliances,
audiovisual electronics or construction equipment.

Who Can Claim the HRTC?

About 4.6 million families in Canada are expected to beneﬁt from the credit.

Taxpayers can claim the HRTC when ﬁling their 2009 tax return.

Eligibility for the HRTC will be familybased. For the purpose of the credit, a family is generally considered to consist of an individual, and where applicable, the individual's spouse or commonlaw partner.

Family members will be able to share the credit.

Source: CANADA'S ECONOMIC ACTION PLAN BUDGET 2009

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