Home renovation projects have become quite common throughout the Canadian real estate market. Whether because people are staying home more now or they want to be more environmentally friendly, people are jumping on the renovation bandwagon. Whether indoors or out, there are many things you can do to revitalize your home. In an environment of historically low interest rates, and plenty of homeowners cashing in on their equity to fix up their humble abodes, more families are choosing to build up and build out, revitalizing their bedrooms, bathrooms and kitchens. Moreover, many homeowners are greening their properties and making their homes smarter. In other words, homeowners are putting their money to work. But did you know that there are tax credits that you can take advantage of and save some money on your renovation endeavours? Unfortunately, as more people engage in home renovations, many individuals are leaving money on the table, in the form of federal and provincial home renovation tax credits.

Can You Claim Renovations on Your Taxes in Canada?

Yes, you might get a portion of your money back from the government to help cover the costs associated with improvements made to your primary residence. But what home renovation tax credits are available?

#1 Home Accessibility Tax Credit

If you are making your property more accessible for a senior or disabled occupant or trying to make it safer, there is the federal home accessibility tax credit. This credit allows homeowners to claim up to $10,000 in expenses and up to 15 per cent of the renovation costs as a deduction on their taxes.

How do you qualify? Here are the eligibility criteria:

  • You’re a homeowner.
  • You’re 65 years of age or older.
  • You are eligible for the disability tax credit.
  • You can make a claim for a qualifying person.
  • Renovations are permanent and completed by qualified trades.

What counts as a “qualified trades” anyway? According to the Canadian government:

“Generally, paid work done by professionals such as electricians, plumbers, carpenters and architects for eligible expenses qualifies as eligible expenses.”

Applicable home renovations may include bathroom reinforcements, wheelchair accessibility modifications, and safety installations such as light fixtures, non-slip flooring and handrails, for example.

#2 Canada Greener Homes Grant

Do you want your fortress of solitude to go green? There are ways to achieve this green dream and save some money.

The federal government is offering $5,000 to complete energy-efficient retrofits on their homes, known as the Canada Greener Homes Grant. This is non-taxable and non-repayable, plus the grant is not required to be declared as income.

So, how do you get the funds? In addition to the application process, the improvements need to consist of upgraded heating equipment, newly installed solar panels, or new doors and windows.

One more thing: new builds that are fewer than six months old are not eligible.

#3 Provincial Home Renovation Tax Credits

The federal government offers these types of tax credits, but various provincial governments also provide them.

Let’s take a look at some of the incentives that other jurisdictions are offering to homeowners.

  • Ontario: Seniors over 65 or people living with family members in this age range can apply for a tax credit for work on their homes, like installing a stairlift. The tax credit is worth 25 per cent of up to $10,000 in eligible expenses.
  • Saskatchewan: You can receive a tax credit of 10.5 per cent of up to $2,100 for completing home repairs, such as better ventilation, resurfacing a driveway, re-shingling a roof, renovating rooms and changing the doors.
  • Quebec: The province of Quebec gives homeowners a 20-per-cent tax credit for any amount paid over $2,500 to renovate residential wastewater treatment systems, like septic tanks. This is only available for primary residences or cottages.

But there are tax programs offered by nearly every other province or territory in Canada for your home renovation projects:

  • Alberta
  • Newfoundland and Labrador
  • Northwest Territories
  • Nova Scotia
  • Nunavut
  • Prince Edward Island
  • Yukon

Plan Today, Save Tomorrow

Before you kick off your next major home renovation project, you must plan now so you can start saving tomorrow. By knowing what you are enhancing or replacing, you can ensure that you can reduce your overall costs by being eligible for any of these tax credits. They will prove to be quite valuable in the end. If you are getting 25 per cent back for your senior-related home improvements, you can be sure to buy yourself or your aging parent a comfortable recliner chair!

Source: remax.ca