Eligible Tax Deductions For Home Improvements

by Tax Guy on February 1, 2011 Print This Post

NOTE: The HRTC was only available for the 2009 tax year and is no longer available.

We have had many questions posted below as well as received by e-mail about the new Home Renovation Tax Credit. We encourage you to continue to ask your questions!

Question: I wanted to know which of the costs we incurred improving our home would be eligible for tax deductions. We did most of the work ourselves but we purchased paint, wood trim, flooring, faucets, sinks, tile etc. We also purchased tools to perform the work. Is any of this deductible? Is there a limit to the amount we can deduct?

Thank you for your response.

In the federal budget presented January 27, 2009, the government announced a home renovation tax credit.

The credit will apply to expenditures in excess of $1,000, but not more than $10,000 than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%) per family. A family is generally an individual, a spouse or common law partner and their children who were, throughout 2009, under the age of 18 years.

Expenditures for work performed of goods acquired after January 27, 2009 and before February 1, 2010, will be eligible for the credit.

February 2011. The Home Renovation Tax Credit was only available or the 2009 tax year and is no longer available. Therefore, I have close the comments to this article.

That doesn’t sound right. There is an extra line in your tax return for 2009. I would think that your tax credit would be treated the same as a tax overpayment. If you have zero income = zero tax paid, you would still get a tax rebate cheque. Does that sound correct? if however you do not fill in your tax return for 2008-2009 you will get nothing.
After reading the information available on the Gvmt web site I find that there are a lot of grey areas.

Tax Guy March 16, 2009 at 12:54 pm: @ Andy
The tax credit is non-refundable.

Stephen Tryhuk March 17, 2009 at 1:09 pm

We are looking at buying a Sunroom for our back yard. Is this part of the allowable items? I don’t see it on the list Also this item would be around the $12,00.00 ++ price range. How much do they allocate if this is in the plan.
Thanks

Tax Guy March 18, 2009 at 8:50 am: If the project is incidental to the property it is eligible.
The amount of the credit would be 15% of $9,000 or $1,350

Bill Derksen March 26, 2009 at 1:53 pm

Is the cost of an airconditioner an eligible expense for this tax credit?

Tax Guy March 26, 2009 at 1:56 pm: @ Bill
Yes it would be an eligible expense!

Tom Cotie March 31, 2009 at 8:03 am

One more
I am buying a new 18′ above ground swimming pool for my backyard. Is this covered by the credit.

Also if I decided to replace the patio stones leading up to my front door would this be covered.

One last thing. I am assuming that there is not a $1000. deductable on each different renovation but rather on the total.

Tax Guy March 31, 2009 at 8:31 am: @ Tom,
The pool would qualify. The patio stones, probably.
The credit is based on the total of all renovations that exceed $1,000.

Valerie March 31, 2009 at 10:05 pm

We already have an inground swimming pool but were never able to use it since we bought the home. It needs a new liner, a gas line must be extended to the pool and it needs a heater. There are also some leaks in the underground pipes. Which of these costs would qualify for the credit? Many thanks.

Tax Guy April 1, 2009 at 11:41 am: @ Valerie,
In all probability yes. In my mind, if a new roof qualifies then a new liner and gas line should qualify.

Rick April 6, 2009 at 8:30 pm