The HRTC is a tax credit for eligible expenses incurred for work performed or goods acquired in respect of an eligible dwelling.
These claims can be made on your 2009 income tax provided the work performed or goods acquired were done so after January 27, 2009 and before February 1, 2010.
What is an eligible dwelling?
An eligible dwelling of an individual is a housing unit located in Canada. All the following conditions must be met:
- You own at the time of the renovation or alteration, alone or jointly with another person, the housing unit or share of the capital stock of a co-operative housing corporation you acquired solely to get the right to inhabit the housing unit owned by that corporation; and
- You, your current or former spouse, or your current or former common-law partner, or any of your or your spouse or common-law partner's children ordinarily inhabited the housing unit at any time during the eligible period.
Who is eligible for the credit?
Eligibility for the HRTC is family based. Eligible family members include you and your spouse or common-law partner, and your or your spouse's or common-law partner's children who are under 18 years of age at the end of 2009 (other than a child who, at any time during the eligible period - after January 27, 2009, and before February 1, 2010 - was married, was in a common-law relationship, or had a child).
The claim can be split among eligible family members but the total amount claimed cannot exceed the maximum allowable.
If two or more families share the ownership of an eligible dwelling, each family can claim its own credit (i.e., each up to $1,350) that is calculated on its respective eligible expenses.
How is the credit calculated?
The HRTC is only available for the 2009 tax year and applies to the total eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 [($10,000 - $1,000) x 15%].
What are eligible expenses?
Expenses are eligible when they are incurred by an eligible family member and are directly attributable to a renovation or alteration to an eligible dwelling (including the land that forms part of the eligible dwelling) and are of an enduring nature and integral to the dwelling.
A general rule is that if the item you purchase will not become a permanent part of your dwelling, it is not eligible.
For examples of eligible and ineligible expenses please click here.
All expenses must be supported by acceptable documentation. Be sure to keep all record, receipts, quotes and bills.
What if I own two eligible properties?
If you, your current or former spouse or your current or former common-law partner or any of your or your spouse or common-law partner's children ordinarily inhabited each property at any time during the eligible period, eligible expenses incurred for both properties will generally qualify for the HRTC. However, the maximum amount of eligible expenses you can claim for the HRTC is $10,000.
If the main reason for owning the recreational property is to gain or produce income, expenses related to the property are not eligible for the HRTC. However, you will not be considered to own the property to gain or produce income if you receive only incidental income related to the property.
How do I claim the HRTC?
A new schedule will be included in your 2009 tax package to allow you to list your eligible expenses and to calculate the amount you can claim. Also, a new line will be added to Schedule 1 to claim the HRTC.
If you are filing a paper return, do not include your receipts or documents supporting your claim. Keep them in case we ask to see them. You must however attach the new HRTC schedule to your paper return.
For further information on how to claim the HRTC, what the Candian Revenue Agency considers acceptable documentations and other related information click here.
Information gathered from The Canadian Revenue Agency.
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