Canada Revenue Agency
www.cra.gc.ca
Common menu bar links
Examples
Example 1
Mrs. Martin is a single, retired senior. She is considering doing some renovations in the condo she owns. But first, she would like to know if the home renovation tax credit will benefit her. She obtains quotes that include the cost of a patio door, granite counter top and the installation cost. Mrs. Martin plans to have the renovations finished by December 31, 2009:
- Patio door: $1,500
- Granite counter top: $2,800
Mrs. Martin will calculate the eligible home renovation expenses as follows:
| Eligible expenses | Amount |
|---|---|
| Patio door | $1,500 |
| Counter top | $2,800 |
| Total eligible expenses (TEE) | $4,300 |
| Maximum eligible expenses (lesser of TEE or $10,000) | $4,300 |
| Base amount | - $1,000 |
| Maximum allowable home renovation expenses | $3,300 |
Result
Since Mrs. Martin's maximum allowable home renovation expenses are $3,300, the maximum credit she can claim is $495 ($3,300 x 15%). However, Mrs. Martin has an annual income of $18,500. She is entitled to the personal amount of $10,320, the age amount of $6,408, and the pension income amount of $2,000, for a total of $18,728. Because Mrs. Martin’s non-refundable tax credits total more than her federal income tax, she has no federal income tax to pay. Therefore, the HRTC will not reduce her tax payable and will not result in a refund.
Example 2
Lorne and his brother Ron jointly bought a cottage for their families in 2004, and each has a 50% interest. They have decided to invest in some renovations to the cottage and split the cost equally. In May 2009, they insulated all the walls, the attic and the floor. They also installed vinyl siding, and bought an energy-efficient furnace (for more information, see ecoaction.gc.ca). Except for the energy-efficient furnace, they did the work themselves:
- Insulation: $6,800
- Siding: $8,600
- Lumber: $850
- Energy-efficient furnace (including labour): $4,300
All of these expenses are eligible for the home renovation tax credit (HRTC).
| Eligible expenses | Amount |
|---|---|
| Insulation | $6,800 |
| Siding | $8,600 |
| Lumber | $850 |
| Energy-efficient furnace | $4,300 |
| Total eligible expenses | $20,550 |
Lorne and Ron are each eligible to claim their share of these total eligible expenses because the HRTC is family-based. As they split the costs equally, they will both calculate their home renovation expenses based on an amount of $10,275 each.
| Lorne's or Ron's share of eligible expenses | $10,275 |
| Maximum eligible expenses (lesser of TEE or $10,000) | $10,000 |
| Base amount | - $1,000 |
| Maximum allowable home renovation expenses | $9,000 |
Result
Lorne and Ron are each eligible to claim $9,000 for home renovation expenses ($10,000 - $1,000), resulting in a HRTC of $1,350 ($9,000 x 15%) for each of them.
