Renovations can add significant value to your home, but they can be very expensive. You could spend tens of thousands of dollars or more, depending on the project you take on.
Luckily, federal or regional governments may offer tax incentives to help offset the cost of renovating your home. Read on to find out how home renovation and green tax credits in Canada can put some cash back in your pocket.
Federal Home Renovation Tax Credits
The federal government currently offers the following home renovation tax credits:
Federal Home Accessibility Tax Credit (HATC)
If your home requires renovations to accommodate a senior or disabled resident’s accessibility needs, you can claim some of the associated costs on your taxes using the Federal HATC. A non-refundable tax credit.
Who Is Eligible For The HATC?
As with all Canadian tax benefits, applicants and their homes must pass certain requirements to obtain the Federal Home Accessibility Tax Credit:
Qualifying Individuals
To qualify, you must either:
- Be at least 65 years old, or
- Hold a valid disability tax certificate, or
- Be supporting a qualifying individual
If you’re 18 or older you can claim the amount for an eligible dependent, caregiver, or infirm dependents age 18 or older on behalf of a qualifying person.
Qualifying Renovations
For renovations to qualify, they must have been installed for the 2016 tax year or later and altered the dwelling for a necessary purpose. This means alterations have to be permanent fixtures that improve mobility, accessibility and/or safety for the qualifying individual, like:
- Bathroom fixtures (walk-in bathtubs, wheel-in showers, etc.)
- Handrails and grab bars
- Wheelchair ramps
- Widened doorways
- Adjustable fixtures (cabinets, counters, etc.)
- Elevators and lifts
Renovations That Don’t Qualify For The Tax Credit
The Federal Home Accessibility Tax Credit cannot be claimed if the expenses aren’t integral to the enduring nature of the qualifying individual’s property, such as:
- Household appliances
- Home-entertainment equipment
- Housekeeping costs
- Routine home maintenance and repairs
- Security monitoring and other similar services
Note: The expenses above are more or less the same for both federal and provincial home renovation tax credits. Necessary/permanent costs will qualify and unnecessary/semi-permanent ones probably won’t.
How Much Can You Claim With The HATC?
Under the terms of the Federal Home Accessibility Tax Credit, qualifying individuals can claim up to $20,000 of total eligible expenses annually for 2022 or subsequent years, which leads to a maximum non-refundable tax credit of $3,000 ($20,000 x 15%).
For 2021 and earlier years, up to $10,000 can be claimed per year, which results in a tax credit of $1,500.
How To Claim The HATC
You can claim the HATC by filing in Line 31285 of your federal tax return and completing “Schedule 12” for Home Accessibility Expenses for your province (in Quebec, it’s called Home Support Services for Seniors). If you’re using tax software, it will prompt you about any renovations performed. It’s on this line where you would input this information.
If you perform the renovations yourself, you can only claim the supply expenses, not the professional labour costs. Examples of supply expenses may include the following:
- Building materials
- Fixtures
- Permits
- Building plans
- Equipment rentals
Some accessibility devices count as medical costs, so you might be able to get double or even triple this tax credit (up to three times yearly) by claiming the HATC and the renovation as an eligible medical expense. In places like New Brunswick and British Columbia, you can get a provincial tax credit too.
Example: A home requires bathroom improvements to help a senior in British Columbia. As a qualified individual, they can get up to 3 tax credits and, if the renovation costs total $20,000, here’s how the credit is broken down:
- $20,000 in medical expenses.
- $3,000* ($20,000 x 15%) yearly federal credit from the HATC.
- $2,000 ($20,000 x 10%) yearly provincial credit from the British Columbia Home Renovation Tax Credit For Seniors and Persons With Disabilities.
Multigenerational Home Renovation Tax Credit (MHRTC)
Many households in Canada have multiple generations of family members. Some live together to combine finances, while others live together to make it easier to care for seniors and those with medical issues. But oftentimes, homes may need to be reconfigured to accommodate several family members.
The Multigenerational Home Renovation Tax Credit (MHRTC) was recently introduced by the federal government to help offset the costs associated with constructing a secondary suite for elderly family members or adults with disabilities.
This refundable tax credit allows eligible Canadians to claim up to $50,000 in qualifying expenses for renovation completed. The tax credit is 15% of the expenses, up to $7,500, for each claim you’re eligible for.
Other Financial Assistance Programs For Those With A Disability
| Ontario Disability Support Program (ODSP) Payment Dates | Learn More |
| BC Disability Assistance | Learn More |
| Saskatchewan Assured Income for Disability (SAID) Payment Dates | Learn More |
| Assured Income For The Severely Handicapped (AISH) Program | Learn More |
Provincial Home Renovation Tax Credits
When filing your income taxes, remember to check if your province or territory offers other tax credits for eligible residents and properties, like these programs:
BC Home Renovation Tax Credit For Seniors and People With Disabilities – Refundable
This benefit offers eligible BC residents a yearly tax credit to cover the cost of acceptable permanent home renovations. The program began in 2012 for seniors and their families, until it was extended to disabled persons (and their families) in 2016.
Who Is Eligible?
To qualify for the B.C. Home Renovation Tax Credit For Seniors and Persons With Disabilities, you must be:
- A resident of B.C. on the last day of the tax year, and either:
- A senior (age 65+) or disabled person, or living with a senior or disabled person
How Much Can You Claim?
This B.C. Home Renovation Tax Credit lets you claim up to 10% of permanent home renovation expenses (incurred on or after April 1st, 2012), to a maximum of $10,000 per year. That means you can get a credit up to $1,000. You can also claim some renovations as medical costs to take advantage of another provincial credit.
Check out how to defer your property taxes.
New Brunswick Seniors’ Home Renovation Tax Credit – Refundable
Qualified New Brunswick seniors, relatives and caregivers can claim a refundable credit of 10% annually to cover eligible expenses they’ve taken on while renovating their primary residence.
Who Is Eligible?
Approval for the New Brunswick Seniors’ Home Renovation Tax Credit is not based on an applicant’s income level. Instead, it’s available to anyone who is:
- A resident of NB
- A senior or relative living with a senior
How Much Can You Claim?
Eligible residents can receive a tax credit of up to $1,000 a year. In other words, you can claim 10% of total eligible renovation costs, up to $10,000.
Check out these tax considerations for seniors.
Ontario Seniors’ Home Safety Tax Credit – Refundable
Introduced by the Ontario 2020 Budget, this refundable tax credit was only supposed to be for the 2021 tax year. However, the 2021 Ontario Economic Outlook and Fiscal Review asked for the program to be extended to 2022 (featuring the same rules).
Saskatchewan Home Renovation Tax Credit
This non-refundable provincial credit was created by Saskatchewan’s Bill 1, The Income Tax (Strong Recovery Home Renovation Tax Credit) Amendment Act, 2020. It’s now administered by the Canada Revenue Agency (CRA) as part of Saskatchewan’s personal income tax system. Up to 10.5% can be claimed for the 2021 and 2022 tax years.
Financial Assistance Programs For Home Renovation In Quebec
While these programs aren’t tax credits technically, they are still government-run programs that provide financial assistance to those looking to make eco-conscious home renovations.
Rénoclimat
Rénoclimat is a program offered by the Quebec government that provides homeowners with advice through a free home consultation. Ultimately, the goal is to improve the energy efficiency of your home through the reduction of your energy consumption.
How To Take Part In Rénoclimat
- Call 1-866-266-0008 to schedule an appointment with an advisor in your area
- An advisor will come to your home and perform a pre-work energy evaluation of your home.
- Have the necessary work completed
- Set up a post-work appointment with your advisor
- Wait to receive your Rénoclimat financial assistance cheque in the mail 10 to 12 weeks after your post-work appointment.
Rénoclimat Financial Assistance Eligibility
Four categories of work are eligible for financial assistance:
- Insulation work
- Work on your home’s airtightness
- Windows and doors
- Mechanical systems
- Ventilation system
- Water heater
- Heat pump
- Geothermal heating system
Chauffez Vert
Chauffez Vert is another program offered by the Quebec government that provides financial assistance for energy efficiency projects that homeowners carry out on their homes. Two types of work are eligible for financial assistance under Chauffez Vert:
- Replacement of an oil or propane heating system with a system powered by renewable energy, such as electricity
- Replacement of an oil or propane water heater with a water heater powered by renewable energy, such as electricity
How To Take Part In Chauffez Vert
- Before starting, make sure you meet all the eligibility requirements
- Have the work completed
- Gather all your necessary documentation
- Fill out and submit an application
- Your application will be reviewed by the Chauffez Vert program administrators
- Wait to receive an email that notifies you of your eligibility
- If you are eligible for financial assistance, you’ll have to wait an additional four to six weeks to receive a cheque.
To participate in the Chauffez Vert program, you need to complete and submit your application within six months of having the work completed.
Bottom Line
Before you begin any renovations on your home, make sure you check for any home renovation or green tax credits in Canada. Although renovations can be a huge pain and a serious financial burden, they’re often necessary to improve the living quality of you or someone you care about. But with the different tax credits available, you can put a little money back in your pocket.
