Qualifying Canadian homeowners are eligible for home renovation tax credits. But how do you know which ones are applicable to your home reno? The first question to ask is: have you bought, built or sold your home in the past year? Then you need to confirm that you did a home renovation within the past tax year. From here, your tax expert will inform you of home renovation tax credits you are eligible for in 2023. These can be used to help offset the cost of renovation projects that were done to improve accessibility and safety for any ageing seniors living in your home.

What’s a tax credit?

Home renovation tax and improvement tax credits can help you make the changes you need to in order to provide a space that is safe and accessible to those you love. These tax credits are meant to make it more affordable to make home improvements. A tax credit can be applied towards a variety of elements in your tax return.

One of the most popular credits are home renovation or improvement tax credits. These credits can be deducted from the amount of taxable income you owe, reducing how much you have to pay that year. This credit may depend on whether you are filing as a business or as an individual. The location, classification and industry the credit is applied to can also impact the amount that can be deducted.

Ontario Home Renovation and Improvements Tax Credits

Each province has unique home renovation tax credits to assist homeowners in making accessibility improvements. Ontario has several grants that make it easier for seniors to make their home safer or more accessible if your loved one lives with you.

Ontario has a number of home renovation grants in Ontario for 2022. Your accountant can provide you with tips on how to maximize the amount of credits available to you.

Ontario Seniors’ Home Safety Tax Credit

Designated for seniors who want to make improvements to their home, this credit allows for up to $2,500 in tax deductions on their Ontario income tax. It can be used towards the improvement of safety and the prevention of falls or other injuries in the home. As we age or begin to develop mobility issues, it can become more difficult to move around safely. But the last thing many people want to do is give up their home. This is where the home safety tax credit can really help. Make sure to record all the renovations you do so you can ensure that you receive the maximum allowable credit. Items that can be applied to this credit include:

Installation of grab bars
Installation of railings
Improved bathroom fixtures like sinks
Floor and stair improvements to prevent falls
Smoke alarms

The deduction is 25 percent of qualifying expenses up to a maximum of $10,000.

To receive this benefit, you must be 65 years old at the end of the tax year, and all renovations must be completed during this time period. Claims can only be made for your primary residence – vacation and second homes do not qualify for this benefit.

If you are doing the renovations to your home on behalf of a loved one, you must be a qualifying relation to the senior resident.

Ontario New Housing Rebate for Substantial Renovations

Did you recently complete a large or total home renovation project? This means you may be entitled to receive between $16,080 and $24,000 in rebates paid on HST. This is equivalent to 75 percent of the HST you paid on eligible construction costs.

To receive this benefit, the property’s fair market value must not exceed $450,000 following the completion of renovations. You must apply for this benefit within 2 years of completing the project. The total renovation must be equal to a 90 percent replacement of the house.

Multigenerational Home Renovation Tax Credit

This credit allows you to improve access to your home for an ageing family member. You can receive up to 15 percent in non-refundable tax credits on renovation expenses up to $50,000.

Applicants must be making home improvements for a close family member or relative such as a parent, child, grandparent or siblings.

Federal Home Accessibility Tax Credit

The HATC credit is a great option to help recoup some of your home reno expenses. It’s non-refundable and can be applied to home renovations that improve access or mobility.

The credit is calculated based on the lowest personal income tax rate in 2022 at a rate of 15 percent, or less than $10,000. The taxpayer can claim up to $1,500 towards home renovation expenses.

Canada Greener Homes Grant

In 2023, homeowners may apply for a new grant if they have improved the energy efficiency in their home. This grant runs in partnership with Enbridge. Details about this grant have already appeared in your mail.

The Canada Green Homes Grant encourages Canadians to take steps to improve the energy efficiency of their home.

Canadians may be eligible to receive:

Grants from $125 to $5000 to assist with the cost of home retrofits
Up to $600 towards the total cost of a pre-and post-retrofit EnerGuide evaluation
$5,000 to $40,000 in interest-free loans towards the cost of major home retrofits

Before beginning renovations, it is important to remember that no third parties have not been approved to solicit homeowners regarding this program. ENERGY STAR and EnerGuide will never call, email or go door to door to sell, inspect or rent heating and cooling products.

Save Money While Renovating Your Home

Homeowners can save potentially thousands of dollars with the help of home renovation tax credits.

There are a multitude of upgrades and renovations you can make to your home to make it safer and more accessible for ageing family members or those with a disability.

Here are a few examples of how to improve your home’s accessibility:

Expand doorways to make room for wheelchairs
Install grab bars in bathroom
Install seat in bathroom
Do a tub to shower conversion
Lower kitchen countertops
Stair modifications like lifts and elevators

Let’s review some of the more popular questions homeowners have about these helpful programs that not only improve your homes’ accessibility, but its value too.

FAQs

What home improvements are tax-deductible in Canada?

There are a variety of qualifying home renovation activities that are covered by the tax credits. These may include renovation labour and professional service costs, building materials, fixtures equipment rentals and permits.

Is there a home renovation tax credit for 2023?

The Multigenerational home tax credit will be available in 2023 to homeowners who meet specific criteria. This credit covers 15 percent of renovation costs up to $50,000. The refundable credit allows homeowners to claim up to $7,500 if they build a secondary dwelling on their property to accommodate a senior or an adult with disabilities.

How to claim home renovation tax credit

You will have to file a tax return in order to claim credits owed to you. You must confirm that the project has been done for a primary resident of the home who is over 65 years of age.

To claim $5,000 on your tax return, you must have acquired the home in 2021 and not lived in another home during the current year or the previous 4 years.

If you recently purchased a home, then you can claim the GST/HST new housing rebate. You must have built a new house to use as your primary residence or completed a substantial home renovation.

To claim a home accessibility credit, you must demonstrate that you have reduced harm and risk in the home. The person the renovations have been completed for must be over the age of 65 years in 2021, or you must meet the qualifying criteria if the renovations are for yourself.

You can withdraw up to $35,000 from your registered retirement savings plan (RRSP) through the home buyers plan if you are purchasing a home.

You must report any tax gains as a result of the sale or purchase of a home. It’s also important to state your intentions when you bought a property, as you may owe taxes on the result of any profit from the sale or purchase.

VIP Classic Moulding recommends taking the time to meet with us to review your project prior to construction. This will allow us to gain a better understanding of the changes and renovations you want to make to improve your home’s accessibility. We can provide you with a cost breakdown and ensure that your home renovation will qualify under the home renovation tax credit.

It’s important to hold onto all receipts and records of work to ensure you can claim the maximum allowed credits.

Contact the Pros

VIP Crown Moulding can help you achieve the home renovation of your dreams, focusing on making improvements that will help the loved ones in your life. We understand how important it is to have a home that is safe and accessible for seniors or those with disabilities. We have a track record of building homes that are both functional, while reflecting your lifestyle needs.

Contact VIP Crown Moulding for an estimate or to arrange a consultation. We look forward to helping you create an accessible and safe living space for you and your family.

How to Claim Home Renovations & Improvements on Your Taxes