Under the proposed taxation changes, Canadians can now claim a non-refundable tax credit on their 2009 tax return based on expenditures (must be eligible) incurred for labor performed and/or goods acquired for home renovations. The dates must fall between January 27, 2009 and before February 1, 2010 in respect of an eligible dwelling.  The HRTC is applicable to eligible expenditures of more then $1,000 but not more than $10,000; this will result in a maximum credit of $1350 ($10,000 - $1000) x 15%).

In order to determine if you are eligible for the HRTC consider the following factors:

•    The dwelling must qualify; any dwelling that you own and is used either by you or your family can qualify, including your home or cottage.
•    Eligibility for the credit is family based; a family will be allowed a single credit that may be shared within the whole family. If 2 or more families share the ownership of an eligible dwelling, each family will then be eligible for their own separate credit, each up to $1,350. This will be calculated on their respective eligible expenditures.
•    The expenditures incurred in relation to a renovation/alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the building.
•    Expenditures must have been incurred after January 27, 2009 and before February 1, 2010, according to agreement entered info after January 27, 2009.

An eligible dwelling must be a housing unit that is eligible to be an individual's principal residence for the individual or one or more of their family members between January 27, 2009 and February 2010. It is eligible where it is owned by the individual and ordinarily inhabited by same individual, spouse, common-law partner, and/or their children. If a portion of the home is rental property (i.e. basement), only renovations that are done to the family's personal space will be eligible for this credit. If renovations are made that are considered common areas (i.e. roof) then the expenses will be divided between personal use and income earning use.

As all expenses must be supported by receipts, so make sure to securely save these items should they be required. Documentation like agreements, invoices and/or receipts must clearly identify the type and quantity of the goods purchased, and/or the services provided. Make sure the information you intend on submitting has:

•    Information that clearly identifies the vendor as well as their business address. If they have a GST/HST registration number, make sure that is included.
•    Description of the goods and the date in which they were purchased.
•    The date of when the goods were purchased, and/or when services were performed.
•    Description of the work performed; make sure the address of the dwelling is included.
•    The amount of the invoice and proof of payment. Receipts and/or invoices must indicate paid in full or be accompanied by other proof of payment, i.e. canceled cheque, credit card statement.

Eligible expenditures include, but are not limited to:

•    Kitchen, bathroom, basement renovations;
•    New carpeting and/or hardwood flooring;
•    New additions, i.e. garage, deck, shed, fence;
•    Re-shingling of a roof;
•    New furnace, boiler, fireplace, wood stove, water heater, water softener;
•    Painting of exterior and/or interior of home;
•    Adding a new driveway or resurfacing of a previous driveway;
•    Window coverings that are directly attached to the window frame, whereby the removal would alter the nature of the dwelling;
•    Laying of new sod;
•    In ground or above ground swimming pool;
•    Fixtures such as lights, fans;
•    Cost of permits, professional services, equipment rentals.

A worksheet is provided on Revenue Canada's website, as well as more detailed information regarding this tax credit.