Home Owner Tax Credit Guide

Home Renovation Tax Credit: What is it?

With the economy going sour, it seems as if the household renovations you have always wanted to do would be put on hold for the moment. However, the Home Renovation Tax Credit or HRTC was introduced into the Canadian federal budget on January 27, 2009. Thus, there may be no need to worry after all.

The HRTC pertains to a non-refundable tax for goods bought for or work done on a qualified place of living. A dwelling is considered qualified if it is the home you or one of or more of your family members use and own personally, from January 27, 2009 to January 1, 2010. Eligibility is family based and is limited to your spouse, and your children under the age of 18 by the end of 2009. Tax credit only happens when a expense of over 1,000 dollars, but not over 10,000 dollars is made.

Home Renovation Tax Credit: Tax Incentives

There is a variety of eligible expenditures that are covered by the tax credit. This includes but is not limited to painting the inside or outside of your house, installing new carpet and flooring, adding fixtures (such as lights and fans), installing a new water heater or a heating/air-conditioning system, and renovating a bathroom, kitchen, or basement.

On the other hand, there are also a number of expenditures that are not eligible to be credited. Most of these pertain to expenses for house maintenance such as general cleaning, carpet cleaning, furnace cleaning, pool cleaning, snow removal, lawn care, and others. Likewise, the purchasing of tools (such as hammers, nails, screwdrivers, etc.), furniture (sofas, lounge chairs, dining tables, etc.), and audio-visual electronics (stereo systems, television sets, video game consoles, etc.) are also not eligible for credit.

As you can see home improvements do qualify for credit. However, you do not have to do everything yourself because the hiring of a contractor also qualifies, as does equipment rentals and other professional services related to home improvement. So feel free to put your hard-earned money to good use by turning your house into a home for you and your family with home renovation tax credit.