Are My Canadian Home Renovations Eligible for a Tax Credit?

Home renovations are a big deal. You’re making improvements, even if it’s only a repair. You’re probably also looking at a pretty hefty expense. Whether it’s a simple guest bathroom remodel or tearing out your outdated kitchen, you should be prepared to receive plenty of bills.

When tax season rolls around, Canadian homeowners can feel like they’re drowning in paperwork. However, in the paperwork is a section on benefits. Did you know claiming home renovation expenses in Canada is often possible? Yes, you may be able to offset some of your home renovation costs by claiming them on your taxes.

Navigating the Home Renovation Tax Credit

Canada has a little-known tax credit homeowners can apply if they make certain renovations. The tax credit doesn’t cover all types of renovations so your new granite countertops may not be a claimable deduction.

The tax credit, known as the Home Accessibility Tax Credit (HATC) often applies to renovations that make a home more accessible to individuals living with disabilities. So, while your new countertops may not make the home more accessible, widening hallways for wheelchair access may be deductible.

Are You Eligible for HATC?

The Home Accessibility Tax Credit is available for almost any homeowner who increases accessibility on their property.

The tax credit is limited to only improving accessibility for individuals with disabilities. The credit can also be applied if your renovations make your home more accessible for the elderly. Before you start getting excited and thinking about installing a wheelchair ramp, the tax credit has a $10,000 limit.

This means your tax credit can’t be more than $10,000 regardless of the project’s total cost. So, if your home renovation project has a $25,000 price tag. HATC may cover up to $10,000, leaving you with a slightly more manageable balance of $15,000.

The tax credit can be applied to costs associated with obtaining building permits, supplies, and even construction plans. Labor costs typically aren’t covered by HATC. The Canadian government has set down some criteria to determine HATC eligibility.

The primary goal of the renovation project is to improve accessibility in the home.
The renovation must be designed to reduce potential harm like injuries to the disabled person.

HATC eligibility requirements also extend to the disabled or elderly resident in the home. The resident must be at least 65 years of age or have a diagnosed disability that’s eligible for Canada’s disability tax credit. If the individual doesn’t meet these requirements, the home renovations typically aren’t eligible for a HATC deduction.

Don’t Forget About Provincial Home Renovation Tax Credits

Along with the Canadian federal government, some provinces also offer tax credits on some home renovations. Once again, your gorgeous new countertops probably aren’t eligible for a tax credit but a new bathtub may meet the requirements.

An example is the BC home renovation tax credit. As you may have guessed, this tax credit is available for homeowners living in British Columbia. The BC home renovation tax credit shares some similarities with the federal HATC program.

The renovations must make the home more accessible for seniors or individuals living with disabilities. So, while new countertops probably aren’t going to make it easier for a disabled person to get around. Installing a handicapped bathtub or shower may meet eligibility requirements.

How much can you deduct from your taxes? The BC home renovation tax credit has a $1,000 limit and can only be used once per year. You must also either be a senior over the age of 65 or living with a diagnosed disability to apply for the tax deduction. If you’re a homeowner and an elderly or disabled person is living on your property, you may also be able to claim the tax credit.

So, how do you know if you qualify for a provincial tax credit? If someone is 65 or older or has a disability, you meet most of the eligibility requirements. The other requirement is you must be a resident of the province.

Keeping Home Renovation Costs More Affordable

Some renovations aren’t covered by HATC or even a provincial tax credit. However, if the renovations are designed to make your home easier and safer for an elderly individual or someone with a disability, you may be able to claim a deduction.

Depending on the province, you may even qualify for federal and provincial tax credits. Before you send in your property taxes, take a minute to read through your possible deductions. Who knows, you may be able to offset a large portion of your home’s renovation costs.

Last Updated: November 2024