It’s hardly surprising that Ontario is still a hotspot for house renovations, given how the COVID-19 pandemic has altered how Canadians see and utilize their residences.
Most of us are now both staying and working at home — therefore, it’s essential that our living quarters be conducive to these activities.
In fact, statistics reveal that in 2020, over half of Canadians renovated their homes for improved safety, routine upkeep, and enjoyment.
However, home renovations are not at all cheap. Although these improvements may also increase the resale value of your property, this fact is of little consolation when you’re paying for them. What’s more, the cost of larger projects that need professional labor can skyrocket the overall total.
Fortunately, there are a few ways to reduce the expense of home improvement.
In addition to conventional choices like taking a home equity loan to pay repairs, there are rebates you can claim for home renovations in Ontario. C
Canadians may get tax credits from the federal and even provincial governments for certain renovations.
These rebates don’t cover everything. However, they’re undoubtedly helpful in cutting some costs — and who wouldn’t want that?
It may be difficult to keep up with the ever-evolving tax law landscape. And they’re not necessarily the easiest to digest either.
So, in this post, we’ll take a look at the various Canadian tax credits available for home improvements, who is eligible to utilize them, and just how much money they may save you. Read on.
1. Home Accessibility Tax Credit
The Home Accessibility Tax Credit is designed to reduce the financial burden of making houses more accessible for individuals with impairments, disabilities, and the elderly (above 65).
It increases the home’s accessibility and functionality for an eligible individual and decreases the risk of injury inside the property.
Putting up a ramp for those who use wheelchairs rather than stairs is a great example of this.
Previously, individuals could claim a 15% refund on up to $10,000 in qualified expenditures. The current federal budget, however, raises that cap to $20,000, allowing for a maximum rebate of $3,000.
Although this may help you pay less in taxes, any credit you get more than your tax liability will not be returned to you.
If you’re looking to file for the Home Accessibility tax credit, you should first familiarize yourself with the Canada Revenue Agency’s website, since there are more precise requirements for qualifying claimants and costs.
This rebate may also be granted to anybody who does renovation work on their behalf. However, they have to be a close relative who has listed the individual as dependent on their tax returns.
Each eligible person is limited to one qualified residence. Households with several eligible individuals are limited to a maximum of $20,000 in total claims.
Several costs associated with home renovation qualify as deductible remodeling costs. Everything needed, from supplies to rentals to permissions, is included. The price of labor and expert services may also be a factor in the total price.
This tax credit has some tricky regulations. However, it may result in significant reductions and of course, enable a disabled person to live in a house that is much easier to navigate.
2. Multigenerational Home Renovation Tax Credit
In many Canadian homes, you’ll find not just one but many generations of family members — from grandparents to young adults. Many of these households find that having all of their relatives under one roof makes it much simpler to care for their aging or disabled loved ones.
Starting in 2023, families may take advantage of the Multigenerational Home Renovation Tax Credit, which provides a tax credit of up to 15% of the qualified renovation or development expenditures associated with creating an additional suite in their primary residence.
This credit, like the Home Accessibility Tax Credit, is non-refundable. In addition, it is only offered to immediate family members. Also, your spending and home must additionally meet several living conditions, before they may be considered viable.
If you’re planning on making such an upgrade, you may want to hold off until 2023 when it is expected to be in full effect.
3. Ontario Seniors Home Safety Tax Credit
If you are 65 (by the end of the tax year) or older, you may be eligible for a temporary, refundable Home Safety Tax Credit towards your federal income tax to keep your place safer and more convenient.
Therefore, if you qualify, you may get credit even though you have no income tax liability for the year.
The tax credit encompasses a wide scope of home improvements, including the installation of handrails and bars in the restroom, the repair of faulty stair steps, and the installation of smoke detectors.
The deduction rate is 25% of qualified costs up to a limit of $10,000. The house also has to have been your main residence during the period of the renovation.
However, if you are a qualified relative of an elderly person and you share a household with them, this may be waived.
4. Ontario New Housing Rebate for Substantial Renovations
Homeowners in Ontario may get a refund of between $16,080 and $24,000 on their paid HST if they have recently completed a major renovation on their primary residence.
Those who contributed HST to the property’s purchase price will essentially get a larger refund. Whereas those who didn’t will get a lesser rebate. 75% of statewide HST spent on qualified building expenses and supplies can be reimbursed.
Furthermore, the property’s after-renovation market value cannot exceed $450,000. Additionally, you should claim this rebate between two tax years after the completion of the modifications.
And as with any major renovations, more than 90 percent of your home must be reconstructed.
5. Home Energy Conservation (HEC) Program
Over $1600 in rebates is available via the Home Energy Conservation program to assist Ontario residents in making their houses more energy efficient. Enbridge manages the program, which covers a wide range of HVAC and residential efficiency upgrades as well as new appliances.
This program may help you save money on matters like replacing your old furnace, finishing your basements, or upgrading your HVAC system. Here’s how you can qualify for the rebate:
- Register: Enter your postal code at https://enbridgesmartsavings.com/. Enbridge will inform you whether you are eligible once you complete three main questions. If you are, Enbridge will advise you to arrange a phone conversation with a Registered Energy Advisor to explain the HEC Program.
- Pre-Audit: Your advisor will schedule a pre-energy assessment of your house. You must pay the audit fee of $250 in order to get an assessment of your home’s efficiency as well as options for repairs and modifications.
- Home Energy Renovations: Carry out the required house improvements to boost your home’s energy efficiency. You should do a minimum of two upgrades, and efficiency must rise by at least 15%.
- Post-Audit Energy Report: As soon as the modifications are finished, make an appointment with your energy adviser for a post-audit. Depending on the scope, this might cost anywhere from $175 to $600, but if you can enhance efficiency by 15%, you’ll be eligible for a $5000 reimbursement when the work is done.
- Receive Your Check: The post-energy-audit check will be sent to you as soon as processing is complete.
Home renovations cost a lot of money. Fortunately, you can save a whole lot with any of these five rebates you can claim for home renovations in Ontario.
Please be sure to check with your financial advisor before making any decisions.
Check out what is on offer in the state of Alberta comparatively, click HERE