Only For This Year – Home Renovation Tax Credit (HRTC)
Time flies! Half a year has almost passed by us. If you have been trying to fix up your living space, and haven’t have time to act on it, this is the time. Why? Because we have a home renovation tax credit (HRTC) only for this year. To be more accurate, it is for any home renovation expenses spend from Jan 28, 2009 to Jan 31, 2010 next year.
- You can claim 15% of your renovation expenses as a non-refundable tax credit.
- Your expense has to be more than $1000, or less than $10,000.
- The based amount is $1000, that means the first $1000 you spend gets no credits
- You can split the expenses and claim the maximum amount of credits as a family unit. A family unit is usually considered as a spouse, common-law partner, children under 18 years of age. However you can only claim one credit for each family unit. E.g. If your eligible amount is $6000, you can split that expenses to claim the tax credit of $3000 in each spouse tax return.
- This tax credit is only for personal use expenditures, not for rental or business property
- The following will NOT be eligible for claim:
- Furniture, appliances, electronics
- Tools
- Any routine maintenance such as duct cleaning, lawn care, etc
- Financing costs, such as interest on the money you borrow to do pay for the renovation
- If you own multiple properties, for example a primary home and a cottage, you can only claim maximum of $10,000 on both properties renovation because this tax credit is by "family unit", not by property.
- If your property you do renovation on are own by more than one person, e.g. if you and your brother each has 50% share of the house, each of you can apply for the tax credit separately.
- Receipts have to be presented as proof of your expenses. You will not need to submit these receipts to CRA, however they requests them in a later day.
| Example: Small amount – one family: You want to install new kitchen cabinets. You bought the cabinets and you hired a contractor to install them for you. Kitchen Cabinets: $3000 Your renovation expenses eligible for claim: Your renovation tax credit: |
| Example – Large amount – one family: You repainted the whole floor, installed new kitchen cabinets and counter top, also build a deck. You hired a contractor to do it all. Total expenses: $20,000 Your renovation expenses eligible for claim: Your renovation tax credit: This amount can be split between you and your spouse: |
| Example: Large amount – two persons own property You and your brother both own a cottage. Both of you decided to renovate the place. Total expenses: $30,000 You and your brother can split the expenses to claim: Eligible expense for you: Your renovation tax credit: |
Although furniture and appliances are not eligible expenses, air and heating system such as air conditioners and furnace are eligible items. So if you want to replace any of these items, maybe switch to a energy saving one, this is the time to do it.
Remember, this tax credit only last till Jan 31, 2010.
You can find more examples on the CRA website: http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/xmpl-eng.html
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