1: What is the Home Renovation Tax Credit (HRTC)?
The HRTC is a non-refundable tax credit for work performed or goods acquired in respect of an eligible dwelling.

2. What is meant by eligible dwelling?

An eligible dwelling is a housing unit that is eligible to be an individual's principal residence or that of one or more of their family members, at any time between January 27, 2009 and February 1, 2010. In general, a housing unit is considered eligible to be an individual's principal residence where it is owned by the individual and ordinarily inhabited by the individual, the individual's spouse or common-law partner, or their children.

3. What is the eligibility period?

The credit will be based on eligible expenditures for work performed or goods acquired after January 27, 2009, and before February 1, 2010. Expenditures incurred pursuant to an agreement that was entered into before January 28, 2009, will not be eligible for the credit.

4. Who will be eligible for the credit?

Eligibility for the HRTC will be family based. A family will generally be considered to consist of an individual or an individual and his or her spouse or common-law partner, including children who will be under 18 years of age, at the end of 2009. A family will be allowed a single credit that may be shared within the family.

If two or more families share the ownership of an eligible dwelling, each family will be eligible for their own separate credit (i.e. each up to $1,350) that will be calculated on their respective eligible expenditures.

5. How will the credit be calculated?

The credit will only be available for the 2009 tax year and applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).

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6. What are eligible expenditures?

To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling, and includes the cost of labour and professional services, building materials, fixtures, rentals, and permits.

Eligible expenditures must be supported by acceptable documentation.

7. What does the CRA consider to be acceptable documentation?

Documentation, such as agreements, invoices, and receipts, must clearly identify the type and quantity of goods purchased or services provided, including, but not limited to, the following information:

·      information that clearly identifies the vendor/contractor, their business address and, if applicable, the GST/HST registration number;

·      a description of the goods and the date when the goods were purchased;

·      the date the goods were delivered (keep your delivery slip as proof) and/or when the work or services were performed;

·      a description of the work (including the address of where the work was performed);

·      the amount of the invoice; and

·      proof of payment.

Please consult our Underground Economy Web page, for tips to protect yourself when hiring a contractor.  To verify whether someone is registered for GST/HST, please consult the GST/HST Registry.

8. 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. Expenditures will not be eligible if the related goods or services are provided by a person not dealing at arm's length with the individual, unless that person is registered for the Goods and Services Tax/Harmonized Sales Tax under the Excise Tax Act. So, in your case, if your brother-in-law is registered for GST/HST and if all other conditions are met, the expenditure will be eligible for the credit.

9. Will expenditures for the common areas of condominiums and co-operative housing corporations qualify for the credit?

In the case of condominiums and co-operative housing corporations, the individual's share of the cost of eligible expenditures for common areas will qualify.

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

No. Individuals who earn business or rental income from part of their principal residence will be allowed to claim the credit only for expenditures made for the personal-use areas of the residence.

For expenditures made 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. For further information, please consult the Business and Professional Income Guide or the Rental Income Guide, as applicable.

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11. If an eligible expenditure also qualifies for the Medical Expense Tax Credit (METC), will I be allowed to claim both the HRTC and METC?

Yes. Where an eligible expenditure qualifies for the METC the individual will be permitted to claim both the METC and the HRTC for that expenditure.

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

No. Eligible expenditures will not be reduced by other government tax credits or grants that the individual may be entitled to.

13. Could you provide me with some examples of eligible and ineligible expenditures?  Yes, some examples are:

16. How will I claim the HRTC?

A new line will be incorporated in the 2009 personal income tax return to allow you to claim the credit.

17. Where can I get more information about this new tax credit?

Additional information will be posted on the CRA's Web site as it becomes available. In the meantime, please see the Department of Finance's Budget 2009 documents for details.