My response to a reader question about the Home Renovation Tax Credit has been one of the most popular posts on Canadian Tax Resource to date. A number of readers have posted questions and I received the same amount of question and more by e-mail.
I though it would make sense to summarize these questions into a single post and include a resource box of helpful links.
#1. The Home Renovation tax Credit is not law yet!
That’s right there is no law on the books for the HRTC. In fact, at the time of writing there wasn’t draft legislation before parliament. Since the eligible period ends February 1, 2010, I would suspect we would see a bill in parliament very soon.
#2. Can I do the renovations myself?
Yes! You can do any renovation yourself but you can only claim the materials used in the renovation for the credit. For example, you could not claim your own time as an eligible expense.
#3. Can I claim renovations already done?
No. Renovations must have started after January 28, 2009 and completed before February 1, 2010.
#4. Can I use the HRTC for work on my cottage?
The HRTC applies only to work done or material acquired for renovations on an eligible dwelling. The eligible dwelling is you principal residence which by definition would be the property owned and ordinarily inhabited by you, your spouse or common-law partner or your children.
#5. What is a renovation?
A renovation is work done or an alteration to the property that is enduring in nature. The CRA has posted a list of eligible and ineligible expenses on their website.
#6. How much is the credit?
The credit (federally) is 15% of eligible expenses that exceed $1,000 but not more than $10,000. If your renovation costs $1,000 – your credit is $0. If you spend $10,000 your credit is $1,350.