Q&A for the Home Renovation Tax Credit (HRTC)

 

• information that clearly identifies the vendor/contractor, their business address and, if applicable, their GST/HST registration number; and
  
  
• a description of the work performed and the dates when the work or services were performed.
  
  

Do I have to submit any supporting documents with my income tax return?

 

No. You will not need to submit any documentation (except the new schedule) when you file your paper return. However, you must keep the documentation in case the CRA asks for it in verifying your claim. If you file electronically, keep all documentation in case the CRA asks to see it.

 

 

If I own both a house and a cottage and incur eligible expenses for both, are both sets of expenses eligible for the HRTC?

 

If you own, alone or jointly with another person, both a house and a cottage and if you, your current or former spouse or your current or former common-law partner or any of your or your spouse or common-law partner's children ordinarily inhabited each property at any time during the eligible period, eligible expenses incurred for both properties will generally qualify for the HRTC. However, the maximum amount of eligible expenses you can claim for the HRTC is $10,000.

 

If the main reason for owning the recreational property is to gain or produce income, expenses related to the property are not eligible for the HRTC. However, you will not be considered to own the property to gain or produce income if you receive only incidental income related to the property.

If during the eligible period, I incurred eligible expenses for a house that I sold and also incurred eligible expenses for my new house, do both sets of expenses qualify for the HRTC?

If during the eligible period you sold and purchased an eligible dwelling, eligible expenses that you incurred for both dwellings will normally qualify for the HRTC. However, the maximum amount of eligible expenses you can claim for the HRTC is $10,000.

 

Will a renovation or alteration qualify for the HRTC if I perform the work myself?

 

If you do the work yourself, the eligible expenses include expenses for building materials, fixtures, equipment rentals, building plans and permits. However, eligible expenses would not include the value of your labour or tools.

 

I am planning to replace my windows in 2009: can I hire my brother-in-law to help me out and still be eligible?

 

It depends. Expenses are not eligible if the goods or services are provided by a person related to you, unless that person is registered for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) under the Excise Tax Act. So, in your case, if your brother-in-law is registered for the GST/HST and if all other conditions are met, the expense will be eligible for the credit.

 

Does work performed by electricians, plumbers, carpenters, architects, etc. qualify?

 

Generally, work performed by electricians, plumbers, carpenters, architects, etc. in respect of an eligible expense qualifies for the HRTC. If you're planning on hiring a contractor to do construction, renovation, or repair work on your home, get it in writing!

 

I rent out my basement. If I renovate the basement for my tenant, will I be allowed to claim the credit?

 

No. If you earn business or rental income from part of an eligible dwelling, you can only claim the amount for expenses incurred for the personal-use areas of your dwelling.

 

For expenses incurred for common areas or that benefit the housing unit as a whole (such as re-shingling a roof), you must divide the expense between personal use and income-earning use.

 

Will the credit be reduced by other government grants or credits that I may receive for the same expenses?

No. Eligible expenses are not reduced by government tax credits or grants to which you may be entitled. For example, if you qualify for and take advantage of a grant under the ecoENERGY - Retrofit Homes program, you can receive the grant and claim the HRTC for the same expense.

 

The Budget also mentions the ecoENERGY Retrofit – Homes grant. What is it and how can I obtain more information?

The ecoENERGY Retrofit – Homes grant is administered by Natural Resources Canada. The grant applies to a host of measures that reduce energy consumption and provide for a cleaner environment. Home and property owners could be eligible for federal grants of up to $5,000 to offset the cost of making energy efficiency improvements to their home or property. Most provinces and territories have complementary programs that offer additional financial assistance based on the results of the ecoENERGY Retrofit evaluation.

For more information, visit the ecoAction Web site.