Canada Revenue Agency
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How to calculate your HRTC
The HRTC is only available for the 2009 tax year and applies to the total eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 - $1,000) x 15%].
The HRTC will not be reduced by government tax credits or grants, or vendor rebates or incentives that you may be entitled to.
Complete Schedule 12, Home Renovations Expenses, to calculate your claim and attach it to your paper return.
Example
Doug and Viviane are married and plan to renovate the house they own this summer. They expect to have the following expenses during the months of June and July 2009:
- New windows: $3,000
- Labour - installation of windows (no invoice) :$1,500
- Carpet cleaning: $200
- Buying tools: $500
- New roof: $3,500
- Interior painting: $500
- New toilet and tub: $600
- New deck: $1,000
To save money, they will do most of the home renovations themselves. Doug's friend Bill will install the windows for them for $1,500 cash, but he will not provide an invoice.
Bill will be required to report the $1,500 on his 2009 income tax and benefit return. He may also have to pay goods and services tax/harmonized sales tax. Failure to report income or pay tax owing can result in penalties and prosecution. For more information, see The underground economy and Will you do it for cash?.
The $200 expense for carpet cleaning and the $500 expense for tools are not eligible for the home renovation tax credit (HRTC). Although labour costs are generally eligible expenses, because Doug and Viviane cannot substantiate the $1,500 window installation cost, they will not be able to include this amount. Therefore, Doug and Viviane will calculate their eligible home renovation expenses as follows:
| Eligible expenses | Amount |
|---|---|
| New windows | $3,000 |
| New roof | $3,500 |
| Interior painting | $500 |
| New toilet and tub | $600 |
| New deck | $1,000 |
| Total eligible expenses(TEE) | $8,600 |
| Maximum eligible expenses (lesser of TEE or $10,000) | $8,600 |
| Base amount | - $1,000 |
| Maximum allowable home renovation expenses | $7,600 |
Result
Either Doug or Viviane can claim the total home renovation expenses of $7,600 or they can split these expenses between them as long as the total amount claimed is not greater than $7,600. As a result, their maximum HRTC is $1,140 ($7,600 x 15%).
Home renovation expenses
Eligible expenses are those incurred after January 27, 2009 and before February 1, 2010, under an agreement entered into after January 27, 2009, for work performed or goods acquired for an eligible dwelling.
