Home renos can be messy, take longer than expected and always seem to come with a “surprise.” But if you are preparing for a reno, first find out if your project is eligible for any Federal and/or Provincial tax credit.
Currently, the federal government offers two types of tax credits:
1. The Home Accessibility Tax Credit.
2. Multigenerational Home Renovation Tax Credit.
The Home Accessibility Tax Credit is intended to help make a property more accessible and functional for people with disabilities or the elderly, and reduce the risk of harm while in the home or while entering it. For example, adding a wheelchair ramp outside or elevator inside.
It provides a Tax Credit of 15%, for up to $20,000 of eligible expenses, for a total possible credit of $3000. This credit is non-refundable, so while it can reduce the amount you owe on taxes, any extra value would not be added to your tax return.
Multigenerational Home Renovation Tax Credit
Expected to be in place for the 2022 tax year, this Tax Credit is aimed at home renovations that create an additional suite or actual dwelling on an existing property- a proposed 15% Tax Credit on up to $50,000 of eligible renovation expenses.
Provincial Tax Credits
Some Provinces offer incentives that dovetail with Federal Programs. Check out www.canada.ca and search: Provincial and territorial tax and credits for individuals.