Home renovations are done to increase the value of one’s property and its appeal. They can help increase profits on any real estate, making selling a home a lot easier when faced with a competitive market. When renovations are deemed necessary, it is a process of gradually replacing old or damaged parts with new ones. The result can be an improved property that is more up-to-date. After such renovations, the costs can stack up and have you wondering if you could get compensated somehow.
Short answer: it is possible! You can check out what home renovation tax credits are available and see how you can claim tax deductions!
What are Home Renovation Tax Credits?
Home renovation tax credits allow you to deduct a portion of your renovation expenses from your taxes. They are a great way to reduce the cost of your renovations. In Canada, provinces all have a different idea of what claims can be considered for a tax deduction. What one province might deem a good claim for a deduction, another wouldn’t consider it at all.
Available Home Renovation Tax Credits
Homeowners can claim a tax deduction for the cost of certain home renovations, provided the project meets certain qualifications. These are generally referred to as “qualified rehabilitation expenditures”. Typically, they can be incurred in one of two ways:
The maximum amount you can claim for each non-cash expenditure ($250,000) is reduced by 50% if you do more than one renovation per calendar year ($100,000). If a non-cash expenditure is over $100 and under $250, this rule does not apply. In essence, this means that if your renovation project costs more than $100,000 but less than $250000, you can still claim 100%, and if it costs more than $250000, you can claim only 50%.
Generally speaking, all expenditures must relate directly to the improvement of your house. However, there are provisions under which expenses can be attributed to enhancements without allowing further room.
When looking into what’s available for tax credits, you can start saving better on home renovations. Doing the required paperwork for eligibility might not seem fun, but it will be worth it in the long run once you see you’re not overspending on home renovations. Don’t let your money completely disappear – see if you qualify now and maximize your home renovations potential!
With over 25 years of experience at Calgary Home Renovations by Aspire, we provide professionalism, quality workmanship and attention to detail that will ensure our clients are 100% satisfied with their Calgary home renovations. Our services include Calgary kitchen renovations, bathroom renovations, basement renovations and development, home additions, and garage additions. Contact us today by visiting our website or calling us at (403) 796-4044!