Effective Jan. 27, any Canadian who spends money on home renovations will be eligible to receive up to $1,350 in tax relief, thanks to the new Home Renovation Tax Credit proposed in the Government’s Economic Action Plan. Here we will outline exactly what is the HRTC and what types of products, services, and expenses are eligible.

The Home Renovation Tax Credit is one of several initiatives designed to help homeowners and homebuyers contained within the Government’s Economic Action Plan. Budget 2009 also announced $300 million over two years for homeowners looking to make their homes more energy efficient. This government is taking steps to help Canadians control their energy costs and keep more money in their pockets.

The Home Renovation Tax Credit will provide a one-year, temporary 15% income tax credit on eligible home renovation expenditures for work performed, or goods acquired, between January 27, 2009 and February 1, 2010. The credit may be claimed on eligible expenditures exceeding $1,000 but not more than $10,000.

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 long-term cost of owning a home. Every time Canadians invest in home renovations, they are helping to create construction and building-supplies jobs in their own communities. Providing an incentive for Canadians to invest in their homes, will encourage investment in local jobs.

What type of products, services and expenses are eligible?

Eligible Ineligible

-Renovating a kitchen, bathroom or

basement

-New carpet or hardwood floors

-Building an addition, deck, fence or retaining wall

-A new furnace or water heater

-Painting the interior or exterior of a house

-Laying new sod

-Labour costs;

-Professional fees;

-Building materials;

-Fixtures;

-Equipment rentals; and

-Permits

-Furniture and appliances (refrigerator, stove, couch)

-Purchases of tools

-Carpet cleaning

-Maintenance contracts (furnace cleaning, snow removal. lawncare. pool cleaning, etc.)

-Financing costs

What type of expenditures will not qualify?

The following expenditures will not be eligible for the HRTC:

i)the cost of routine repairs and maintenance normally performed on an annual or more frequent bias;

ii) expenditures that are not integral to the dwelling, and other indirect expenditures that retain a value independent of renovation

iii) expenditures for appliances and audio-visual electronics; and financing costs

Who is eligible to participate, and what are the conditions?

Family members (i.e. spouses or common-law partners and their children under 18) are subject to a single limit based on their pool expenditures. The credit is only available for a dwelling that is eligible to be the family principal residence or that of one or more of their other family members.

What should consumers do?

Begin to save your receipts for any home improvement project that you recurrently working on that qualify for the tax credit

How can I get more information?

Additional information on the Home Renovation Tax Credit will soon be available

on Canada Revenue Agency’s website at www.cra-arc.gc.ca

Information is also available at Department of Finance Canada at www.fin.gc.ca