Saving & spending

Making the most of your HRT credit

Want to take advantage of the Home Renovation Tax Credit (HRTC)? If so, you’ll need to ensure that your upgrade project is eligible, and then start keeping receipts. The reward? A tax credit of up to $1,350 for the 2009 tax year.

To help you make the most of the HRTC, Philippe Brideau, spokesperson for the Canada Revenue Agency (CRA), offers the following advice for both house and condo owners.

Personal use dwellings only

In order to be eligible, you must be a homeowner (house or condo) and use the dwelling that’s being upgraded for your own personal use. Renovations or upgrades to part of your home that’s rented to a tenant will not be eligible.

If you own a condo, your share of expenses for upgrades made to a common area should be covered.

Mind the amount and dates

“The credit will be based on eligible expenditures for work performed or goods acquired after January 27, 2009, and before February 1, 2010,” says Mr. Brideau. “It will apply to eligible expenditures of more than $1,000, but not more than $10,000. Since the tax credit is 15% of the total expenditure, families can receive a tax credit of up to $1,350 — meaning 15% of $9,000 since the first $1,000 spent is not eligible.”

When you’re filing your 2009 personal tax return, you’ll notice a new line that allows you to claim the HRTC.

Expert tip: Get a better understanding from HRT calculation examples.

The upgrade must be a permanent one

To qualify for the credit, “the upgrades you make must be permanent in nature,” says. Mr. Brideau. “And they can be made to the dwelling itself, to an outside dwelling, such as garage, or to property, such as landscaping.”

As a guideline, the CRA offers the following examples of eligible projects:

• Renovating a basement, bathroom or kitchen
• Purchasing a new furnace, boiler, water heater, or fireplace
• Purchasing and installing new flooring, such as carpeting, tiles or hardwood
• Resurfacing your driveway
• Installing an in-ground or above-ground permanent swimming pool
• Building an addition such as deck, garage, shed, or fence
• Painting the interior or exterior of your home

Ineligible projects include:

• Purchasing furniture, appliances, or home theatre equipment
• Cleaning services — for your home or an item such as carpeting
• Buying tools
• Maintenance fees — such as snow removal, lawn care, or pool cleaning, for example.

“For some projects, only a portion will be eligible,” explains Mr. Brideau. “For example, if you’re improving your garden, then laying new sod will be eligible, but purchasing flowers will not.”

Hiring eligible contractors or trades people

The work of contractors, electricians, plumbers, carpenters and architects will qualify. But if you’re planning to pay a family member or someone who does not have a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) number, then check with the CRA before proceeding (see Get more information below).

Collect all necessary documentation

“Agreements, invoices and receipts must clearly identify the type and quantity of goods purchased or services provided,” notes Mr. Brideau. Make sure all documentation includes relevant information, including:

• Date
• Vendor or contractor’s name, business address, and GST/HST number
• Description of work provided or items purchased
• Total cost amount
• Proof of payment — for example, an invoice must be marked “paid in full” or have proof of payment attached (credit card slip or cancelled cheque)

Expert tip: Use the CRA’s HRT receipt log for a quick way to log your expenditures.

Combine to maximize

“If your project will make your home more energy efficient, then you can apply for both the HRTC and the ecoENERGY Retrofit — Homes grant,” says Mr. Brideau. “Some provinces and territories also have complementary programs, so check the ecoACTION website to see if you’re eligible for even more savings.”

Get more information

To get more information about the HRTC:

• Visit the CRA website for extensive information
• Call the CRA’s individual income tax enquiries service: 1-800-959-8281