The Federal Government of Canada passed into law the Home Renovation Tax Credit as part of the last budget ratified in the House of Commons. The measure implemented a temporary 15-per-cent Home Renovation Tax Credit (HRTC) to provide approximately $3 billion in tax relief to an estimated 4.6 million Canadian families.
The HRTC is intended to encourage investments in Canada's housing, as well as provide employment for trades-people and boost sales for those who make and sell building products. It applies to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010. Work committed to after January 27, 2009 will qualify.
The 15-per-cent credit may be claimed on the portion of eligible expenditures exceeding $1,000 but not more than $10,000. It will provide up to $1,350 in tax relief to the tax payer.
There are two things that must be done in order to receive the tax credit. One must retain receipts for the eligible expenses (they do not have to be sent in to Revenue Canada) and one must also claim the deduction on the year-end tax filing for the period. 
This is an example of HRTC eligible and ineligible expenses.
Eligible
• Renovating a kitchen, bathroom, or basement
• New carpet or hardwood floors
• Building an addition, deck, fence or retaining wall
• A new furnace or water heater
• Painting the interior or exterior of a house
• Resurfacing a driveway
• Laying new sod
Ineligible
• Furniture and appliances (refrigerator, stove, couch)
• Purchase of tools
• Carpet cleaning
• Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)
The HRTC can be claimed by homeowners for renovations and enduring alterations to a dwelling, or the land on which it sits. A dwelling will generally be considered eligible for the credit if it is used for personal purposes, such as a house, cottage and condominium unit. 
Benefits of the HRTC—Example
Greg and Karen, a couple who have a son getting married this year, have decided to upgrade their home so that wedding guests who stay with them will have a fresh place to live while they visit the province. Greg and Karen paint some of the rooms, upgrade the deck, stain the house and install new flooring throughout the home in 2009.
It cost them a total of $10,000 in expenditures. After taking into account the $1,000 minimum threshold, a 15-per-cent credit will be available on $9,000 in eligible expenditures, providing tax relief of $1,350.
When you consider that in Newfoundland the HST charged on all goods and services is 13%, one can quickly see that the HRTC roughly computes to an amount similar to a wavier of HST for eligible expenses. The amount won’t buy you a new car or a trip down south but the way Greg and Karen see it, “Its money better in their pockets than being squandered by the government on some futile public inquiry.”
R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.
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