Eligible Home Renovations Covered Under HRTC

Canada’s Economic Action Plan, also known as the 2009 Budget, is chock full of good stuff for the average Canadian. One credit that is getting a lot of attention is the increasingly popular HRTC, or Home Renovation Tax Credit.

Briefly, the HRTC allows homeowners a tax credit of between $1,000 and $10,000 just to fix up their houses.

Well, it isn’t quite as simple as that. The homeowner must pay the first $1,000 of eligible renovation expenses and then the government will pick up 15 percent of what’s left, up to a maximum of $10,000.

Example of Eligible HRTC Credit

The homeowner spends $10,000 on eligible renovation projects. The first $1,000 is paid by the homeowner (kind of like a deductible), leaving $9,000 in expenses. 15 percent of that would be $1,350; this is the total credit that can be claimed on a 2009 personal income tax return.

Be aware that there are some projects that don’t qualify for the tax credit. However, the good news is that many more do qualify for the Home Renovation Tax Credit, as part of this 2009 Canadian stimulus package.

The renovations that are eligible under the HRTC are those that are considered permanent in nature. Think of it this way: if the improvement cannot be removed from the home or the surrounding land without significantly changing the nature of the home or land, then it qualifies.

Eligible Renovations Covered by the Renovation Tax Credit

  • A new roof
  • Renovating a kitchen
  • Interior design plan to renovate a master bathroom into a spa
  • A new heating system or water heater
  • Painting the interior and/or exterior of a home, cottage or other residence
  • Installing a hot tub
  • A new deck or patio
  • Landscaping
  • Window replacement
  • Window treatments such as blinds
  • New carpet
  • Upgrading the insulation in a home

This list is by no means exhaustive; just remember that if removal of the renovation would leave the house or property in poor condition, then the renovation qualifies under the HRTC.

Contractor and Permit Fees are Eligible

For homeowners who plan on hiring professionals to do the interior design or home renovation work, here’s another piece of good news: the fees paid for plumbers, electricians, or other professionals, are also eligible expenses under the HRTC.

Additionally, the cost of building materials and supplies is also considered an eligible expense under the HRTC. This would include items such as sod for landscaping, the price of new granite counter tops or custom maple cupboards, new plumbing fixtures, floor covering (carpet, tile or hardwood) and many others. Permits and equipment rentals are also eligible expenses under the HRTC.

It is imperative that all receipts detailed copies of contracts are retained as all documentation will be required for any 2009 income tax return Home Renovation Tax Credit claim.

The HRTC is only eligible on purchases made on or before January 31, 2010, so any plans to perform home improvement projects should be planned, budgeted and completed as soon as possible.

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