The Canada Revenue Agency has made a tax credit available to anybody who purchased, constructed, remodelled, or sold a property in the fiscal year 2023–2024. You must file your tax return during the tax filing period to be eligible for the $7,500 Home Renovation Credit. With the implementation of this tax credit program, the CRA hopes to encourage Canadians to buy or restore their homes as well as to support the construction industry by bringing in new business possibilities that will boost the country’s economy. The $7,500 Canada Home Renovation Credit is available to all first-time homebuyers and those with disabilities as of April 20, 2024.

$7,500 Canada Home Renovation Credit 2024:

The CRA has introduced the Home Renovation Tax Credit, a new refundable tax credit that consumers can apply for in 2024. You can deduct from this HRTC the costs of renovations you carried out to begin using your secondary residence. An elderly or disabled person who meets the requirements for the disability tax credit can live with a qualified relative in this supplementary unit, provided they are eligible under the tax laws. 

Check your qualifying requirements first if you would like to be eligible for the $7,500 Canada Home Remodeling Credit in April 2024 for remodelling costs. $50000 can be claimed as renovation expenses if the qualifying renovation is finished at the time of the claim and qualified expenditures were made. To be qualified for the claim, you will receive a tax credit of up to 15% of your cost or $7500, whichever is less.

Eligibility:

• Canadian national.
• In prior fiscal years, you were a consistent taxpayer to the CRA.
• Property must be owned by a qualified individual and located in Canada.
• The individual must reside in Canada from January 1 to December 31 during the claim period. He may be in a qualified relationship or a qualifying individual.
• The property undergoing renovations must be occupied by one of the eligible persons or qualified relatives.
• A qualifying person must principally dwell, or expect to reside, within a year following the conclusion of the renovation period, as must a qualifying relation of the qualifying person.
• A senior citizen, someone over 65, or an adult who meets the requirements to receive the Disability Tax Credit (DTC).
• If the contractor is a business, they must provide contractor data, a business address, and a GST/HST registration number.
• The person must be aware of the anticipated expenditures of home renovations.
• No matter when the renovations began, they must be finished within the tax year.

Suppose the qualified individual meets the following requirements. In that case, he may still be entitled to receive the money in either his own or the qualifying relative’s account in the event of his death:

• a Canadian citizen at the time of death.
• A Canadian citizen just before passing away, after which it is valid till the end of the year.
• At year’s end, they were the same age as if they were still living.
• A spouse or common-law partner is still living and hasn’t found a new partner by the end of the year.

Calculating the Amount of the Canada Home Renovation Tax Credit:

• Eligible Renovation Expenses: Up to $50,000
• Maximum Claimable Amount: $7,500

With a maximum claimable value of $7,500, individuals can claim up to 15% of qualifying renovation expenditures paid during the tax year under the Canada Home Renovation Tax Credit. The costs associated with establishing a secondary unit to house an elderly or disabled individual who qualifies for the disability tax credit and lives with a qualified relative are included in the eligible remodelling expenses.

Terms Concerning the $7,500 Home Renovation Credit:

• Renovations that construct a secondary unit in the home that a qualifying person or qualifying relationship will eventually occupy are called qualifying renovations. The credit is worth $50,000 less than the qualifying expenditure, or 15% less.
• Qualifying Individual: The person for whom the secondary unit is being built and who satisfies the requirements for tax credits. You can be:
  • Sixty-five years of age or older before the conclusion of the tax year’s remodelling period.
  • You must be 18 or older before the end of the tax year for the renovation period to be eligible for the disability tax credit (without considering limits on attendant care).

• Qualifying Relation: The qualifying individual may be related to one or more family members, including parents, grandparents, siblings, aunts, uncles, nieces, nephews, cohabiting spouses, and common-law partners.
• A housing unit in Canada owned by a qualified individual or qualifying relation, where both typically reside or plan to reside within a year following the remodelling period, is considered an eligible dwelling.

How to apply for the Home Renovation Credit of $7,500?

• Apply for the claim at the end of the renovation period within the tax year.
• The renovation lasts from the first qualifying cost incurred until it is finished.
• If several people split the costs, the credit may be divided if specific requirements are met.
• In a single year, more than one eligible renovation may be claimed.
• Have the following supplementary materials on hand:
  • Specifics of the products or services bought.
  • Proof of business address.
  • Vendor information.
  • Dates of purchase.
  • Evidence of delivery.
  • Job descriptions and invoice amounts are addressed.
  • Evidence of purchase.

The $7,500 Home Renovation Credit Claiming Process?

To claim:

• Schedule 12 can be used to claim it on line 45355 of the income tax and benefit return.
• To record MHRTC-related costs and determine the total credit that may be claimed, use Schedule 12.
• It is impossible to claim the exact cost for more than one tax credit.

Non-Qualifying Expenses:

• Regular upkeep or repairs.
• Appliances for the house or technological gadgets for enjoyment.
• Services include housekeeping, security monitoring, and exterior upkeep.
• Financing the renovation’s expenses.
• Products or services offered by family members without their registration for GST/HST.
• Costs are reimbursed by another tax credit, such as the Home Accessibility Tax Credit (HATC) or the Medical Expenses Tax Credit (METC).
• Expenditures without proper receipts to prove them.