In our Spring 2009 edition, we discussed the Home Renovation Tax Credit (HRTC) that was included in the 2009 federal budget. The HRTC is a temporary 15% nonrefundable tax credit that applies to home renovation expenditures made between January 27, 2009 and February 1, 2010. The HRTC can be claimed on the part of home renovation expenditures over $1,000 and under $10,000, which results in a maximum tax credit of up to $1,350.
A Notice of ways and means motion to implement the HRTC was tabled in the House of Commons on September 14, 2009 and was adopted by the House on September 18, 2009.
We have received questions from boards of directors and property managers regarding the type of expenditures that will qualify for the tax credit. The Canada Revenue Agency has issued rulings and letters dealing with questions surrounding this new credit.
Below are some of the items that will qualify for the HRTC according to rulings and letters issued by the CRA. These may provide guidance in determining qualifying expenditures.
- Sanding and refinishing of hardwood floors, including expenses for labour, materials, and equipment rentals. The cost of purchasing tools would not;
- New sod, trees, perennial shrubs and flowers that are planted;
- The installation of a new garage door;
- The permanent installation of security window film;
- The replacement of an existing driveway;
- The removal of trees (in some circumstances);
- Renovation of a kitchen, excluding appliances;
- Installing a new eavestrough qualify for the HRTC;
- Upgrading, replacing, or installing septic tanks, except if the cost is part of routine repairs and maintenance, normally performed on an annual or more frequent basis;
- The purchase and installation of hot tubs/spas, which are permanently positioned in place and hard wired into the home’s electrical panel;
- The purchase and installation of a pool liner;
- The installation of solar photovoltaic (PV) panels;