Home renovation tax credits allow you to deduct a portion of your renovation expenses from your taxes. They are a great way to reduce the cost of your renovations. However, you must meet specific eligibility requirements to receive the credit. Continue reading to learn about the home renovation tax credits available to you and how they can save you money on your renovations.
|Credit Name||Max annual credit amount||Refund rate||Max eligible spend|
|Home Renovation Tax Credit|
|$945 - $1,155||10.5%||$9,000 - $11,000|
|Home Renovation Tax Credit for Seniors and Persons with Disabilities|
|Seniors' Home Safety Tax Credit|
|New Housing Rebate for Substantial Renovations|
|$16,080 - $24,000||75% of HST paid||Fair market value after renovations can't exceed $450,000|
|Upgrading of Residential Wastewater Treatment Systems|
|$5,500||20% of costs over $2,500||$30,000|
|GST/QST Rebate for Substantially Renovated Housing|
|$6,300 - $9,975||36%/ 50% of GST/ QST paid||Fair market value after renovations can't exceed $300,000 - $450,000|
|Green Energy Equipment Tax Credit|
|No Limit||7.5% - 15%||No Limit|
|Seniors' Home Renovation Tax Credit|
|Residential Construction Rebate|
(Newfoundland & Labrador)
|$10,000||25%||$40,000 & Home value can't exceed $350,000 after renovations|
|Multigenerational Home Renovation Tax Credit|
|Substantial Renovation Tax Rebate|
|$6,300||36% of GST paid||Fair market value after renovations can't exceed $450,000|
|Home Accessibility Expenses Tax Credit|
During the 2021 & 2022 tax seasons, homeowners can deduct up to $2,100 from Saskatchewan income taxes due to renovating their primary residence. The credit amounts to 10.5% of the costs incurred.
Eligible expenses include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits. Additionally, the $2,100 is split between the two years, meaning a maximum of $1,155 for 2021 and $945 for 2022.
Tax credits allow you to deduct a specified amount from your taxes due every year. If you do not use the entire credit in a specific year, you can generally carry the unused deductions into future years. Additionally, most programs allow you to share the credit with a partner or spouse.
British Columbia offers a home renovation tax credit for seniors and persons with disabilities. The credit is worth up to $1,000 per year and can be claimed for the cost of eligible home modifications. The credit allows you to deduct 10% of your qualifying expenses from BC income taxes.
To be eligible, you must be 65 years or older or have a disability that prevents you from completing essential daily activities on your own. However, those living with a senior or someone with a disability can claim the deduction on their tax return.
Seniors can receive a tax credit of up to $2,500 to deduct from their Ontario income taxes. The credit is for home safety improvements that help prevent accidents and injuries. The tax credit covers a wide range of home renovations, including installing grab bars and rails in the bathroom, fixing loose stair treads, and adding smoke alarms. The deduction rate is 25% of qualifying expenses for a maximum of $10,000 in spending.
Eligible applicants must have been 65 years or older by the end of the tax year of the year in which renovations were completed. Additionally, your home must have been your primary residence at the time of the renovation. However, if you reside with a senior, this requirement is waived if you are in qualifying relation.
Ontario homeowners who made a substantial renovation on their principal residence are eligible to receive a $16,080 - $24,000 rebate on HST paid. Those who paid HST on the purchase price of their property are eligible to receive the more significant rebate, while the smaller rebate is reserved for those who didn't. The rebate amounts to 75% of provincial HST paid to eligible construction costs and materials.
Additionally, the property's fair market value can't exceed $450,000 after the renovations have been completed. You must also apply for this rebate within two tax years of completing the renovations. As with all substantial renovations, over 90% of the house must be replaced.
The Ontario healthy homes renovation tax credit for seniors was a temporary tax credit from 2012-2016. The credit provided seniors with up to $1,500 per year for primary residence modifications that improve safety and accessibility. The credit is calculated as 15% of qualifying expenses.
To be eligible, you must have been 65 years or older at the time of the renovation, and your home must have been your primary residence. The upgrades must have minimized physical barriers, enhanced mobility within the home, or improved access.
During the 2017 and 2022 tax years, Quebec homeowners can deduct a maximum of $5,500 per home from their Quebec income taxes. As the name suggests, the credit applies to those who build or renovate a residential wastewater system at their primary residence or cottage. An example of a residential wastewater system is a septic tank.
The credit provides a 20% refund on expenses over $2,500. For example, if you spent $10,000 on installing a septic tank. You would receive a 20% deduction on $7,500 (10,000-2,500). This would amount to a $1,500 tax credit.
Quebec residents can receive a partial refund on the GST & QST paid to complete a substantial renovation. You can receive a maximum rebate of 35% of GST paid and up to 50% of QST paid. This translates to a maximum rebate of $6,300 and $9,975 on GST and QST, respectively.
However, a substantial renovation means over 90% of the building must be changed. Additionally, the rebate starts to reduce as your property's fair market value after renovations exceeds $350,000 for the GST rebate and $200,000 for QST rebate. There is no rebate after the fair market value exceeds $450,000 for GST and $300,000 for QST.
This budget was available to Quebec homeowners on two separate occasions; the 2013-2014 and the 2016-2019 tax years. The tax credit refunds 20% on eligible expenses above $2,500 for a maximum $10,000 credit.
Eligible expenses must have a positive environmental impact or improve the energy efficiency of a principal residence or cottage.
As the name suggests, this tax credit applies to installing energy-efficient equipment for Manitoba homeowners. Depending on the equipment installed, there are various refund rates to be deducted from Manitoba income taxes:
Qualifying residents can receive up to a $1,000 credit from New Brunswick income taxes for renovations intended to provide mobility or decrease the risk for seniors. The refund rate is 10%, meaning you can spend a maximum of $10,000 to receive a $1,000 credit. However, any government assistance (excluding tax credits) must be deducted from the $10,000 to calculate the new limit. Additionally, those living with seniors 65 or older in a primary residence can receive the credit.
This tax credit allows homeowners to deduct the cost of renovation projects from their Newfoundland & Labrador income taxes. Locals can receive a rebate of up to $10,000 for changes made to their primary residence. The refund rate is 25% for expenses up to $40,000. Homeowners must also sign a pre-approval form before starting the project.
The 2022 budget announcement revealed the Multigenerational Home Renovation Tax Credit. This program is expected to start in 2023 to extend homes to include a secondary suite for senior or disabled family members. The maximum credit is $7,500, which is a 15% refund on up to $50,000 in costs. Any additional expenses won’t increase your credit.
To receive the rebate, you must meet the following criteria:
While this program was just announced, more information will follow soon.
The GST/HST new housing rebate program also offers a rebate on substantial renovations for your primary residence. For a renovation to qualify as "substantial," it must exceed 90% of your home.
There are numerous conditions for the rebate. Only living spaces are considered; renovations to your garage or crawlspace do not qualify. A basement remodelling on its own would not be regarded as a significant makeover. Additionally, the fair market value of your home after renovating can't exceed $450,000.
Senior residents or those with disabilities can deduct certain expenses that increase the accessibility of their primary residence. This credit is available for many costs, including wheelchair ramps, grab bars, and widened doorways. The 2022 budget also proposed expanding this credit. It is expected that renovations made after January 1, 2022, will be eligible for a maximum $3,000 deduction. This doubled from $1,500 in the previous year.
This credit was first introduced in 2009 and was available for homeowners who made energy-efficient home renovations. The credit was later expanded to include all types of home renovations in 2010. The credit is worth up to 10% of the cost of your renovations, with a maximum credit of $1,000.
If you're looking for a way to improve your home and save money on taxes, then renovating could be the solution. However, it's essential to understand that not all renovation expenses are considered applicable. Homeowners may also use a home renovation loan to make changes to their property.
Before beginning renovations, you should speak with an accountant or tax pro to know what to expect. You can also research how much the average home renovation costs in your area by checking out price estimates from a few contractors.
After all, doing a little research upfront will save you time and money when it comes to filing your taxes!