Earlier this year, Budget 2009 introduced a temporary Home Renovation Tax Credit (HRTC) to help stimulate economic growth and encourage Canadians to invest in improvements to their homes.  The HRTC will provide meaningful tax relief to help Canadian homeowners make improvements to their property, while promoting broad-based economic activity.

Individuals will be able to claim a 15-percent non-refundable tax credit for eligible expenditures made in respect of eligible dwellings.  The credit will apply to expenditures in excess of $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).

Expenditures for work performed, or goods acquired, between January 27, 2009, and before February 1, 2010, will be eligible for the credit.  Individuals may claim this credit in their 2009 income tax returns.

Eligibility for the HRTC will be family-based.  While it is anticipated that in most cases one family member will claim the whole of the credit, any unused portion may be claimed by one or more of the other family members as a credit against that person's tax otherwise payable.  Two or more families that share ownership of an eligible dwelling will each be eligible for their own credit.  Each family's credit will be determined by their respective eligible expenditures in excess of $1,000, but not more than $10,000.

The HRTC credit does not apply to purchases of furniture or appliances.