The tax credit is 15% of eligible expenditures on home
renovations made in respect of eligible dwellings.
The tax credit applies to expenditures over $1,000, up
to $10,000.
The maximum tax credit amount is $1,350 per family
($9,000 x 15%)
Tax credit will apply for costs incurred after January
27, 2009 and before February 1, 2010.
Costs related to an agreement entered into before
January 28, 2009 are not eligible for the credit.
Costs incurred will be claimed on the 2009 tax return,
including the January 2010 costs.
If an qualifying expenditure for the HRTC also
qualifies for the medical expense tax credit
(METC), both tax credits can be claimed for the same expenditure.
Eligible period
The eligible period is the period that began on January
28, 2009 and ended on January 31, 2010.
Qualifying relation
A qualifying relation in respect of an individual means
the individual's spouse or common-law partner
the individual's child or children who are 17 or
younger at the end of 2009. The child is not a qualifying relation
if, at any time during the eligible period, he/she was married or in a
common-law relationship, or has a child.
Family, for purposes of sharing the HRTC:
A family consists of an individual, and where
applicable, their qualifying relations.
Each family is subject to the maximum tax credit of
$1,350, based on eligible expenditures.
The tax credit can be apportioned among the family members.
If the individuals cannot agree as to what portion of the tax credit each
can deduct, the Minister of National Revenue may fix the portions.
If two or more families share ownership of an eligible
dwelling, each of those families will be eligible for their own credit up
to $1,350, based on eligible expenditures.
Eligible dwellings
An eligible dwelling of an individual means a housing unit
located in Canada where the individual owns, or owns with another person
the housing unit; or
a share of the capital stock of a co-operative housing
corporation
A trust under which the individual is a beneficiary may
also own the housing unit, or the share of the capital stock of a co-operative
housing corporation.
To qualify for the HRTC, the housing unit must be ordinarily inhabited
at any time during the eligible period by
the individual,
the individual's spouse or common-law partner,
the individual's former spouse or common-law
partner, or
a child of the individual
The housing unit could include a cottage or vacation home.
An eligible dwelling includes the land under the
housing unit and up to 1/2 hectare of contiguous land (or greater area of
land if the individual establishes that it is necessary for the use and
enjoyment of the housing unit as a residence).
For condos and co-op housing, costs will be eligible
for the credit if they are incurred to renovate the individual's principal
residence "unit", and a share of the cost in respect of common
areas may also be claimed.
Where a portion of a principal residence is rented out,
the credit can be claimed only for expenditures made in respect of the
personal-use areas of the home.
Where costs are incurred for common-areas of a
partly-rented home, such as a roof, the credit will apply only to the
portion allocated as personal use. See our article on property
rental expenses.
Qualifying expenditures
Means an outlay or expense that is made or incurred by
an individual or a qualifying relation of the individual.
Must be incurred during the eligible period, and supported by receipts, which will not have to
be submitted with the tax return, but must be available if requested by
Canada Revenue Agency (CRA).
Expenditures will not qualify if they were incurred
under the terms of an agreement entered into before January 28, 2009.
Expenditures will qualify if the renovation or
alteration of the eligible dwelling is of an enduring nature, and is
integral to, or built into, the dwelling. (qualifying
renovation)
Examples of qualifying expenditures would be
re-shingling a roof
interior or exterior painting
kitchen, bathroom, or basement renovations
replacing windows or doors
new furnace or water heater
resurfacing a driveway
laying new sod
upgrading wiring
upgrading insulation
Expenditures do not qualify if the goods or services
are provided by a person with whom the taxpayer is not dealing at
arm's length (e.g. close relative), unless that person is registered
to collect GST/HST.
Expenditures do not qualify if they are for repairs
and maintenance which are usually performed on an annual or more frequent
basis.
Expenditures for appliances (e.g. fridge, stove) and
audio-visual electronics do not qualify.
Financing costs do not qualify.
Other examples of non-qualifying expenditures:
furniture and draperies
purchase of tools or other construction equipment
carpet cleaning
house cleaning
maintenance contracts for furnace cleaning, snow
removal, lawn care, etc.
an air conditioner which is a portable plug-in type
(an air conditioning unit which is built in to the home heating or
ventilation system would be eligible).
goods that have been previously used, or acquired
for use or lease, by the individual or a qualifying relation of the
individual
made or incurred for the purpose of gaining or
producing income from a business or property
HRTC documentation
Make sure you have the documentation you need to support
your HRTC claim. The type and quantity of goods purchased or services
provided must be clearly identified on any agreements, invoices and
receipts. Required information includes, but is not limited to:
information that clearly indentifies the
vendor/contractor, including the business address, and if applicable, the
GST/HST registration number;
the date the goods or services were purchased or
provided;
a description of the work performed including the
address where the work was performed; and