What is the Home Renovation Tax Credit, and how can you get it?

Home Renovation Tax Credits are tax breaks that allow homeowners to deduct a portion of their renovation costs from the amount of taxes they owe. These credits are a great way to reduce the cost of renovations, but you must meet specific eligibility requirements to qualify for the credit. In Canada, you can apply for federal tax credits that are available across Canada, as well as tax credits specific to your province.

Tax credits for qualified renovations help offset the cost of energy-efficient systems, accessibility modifications, or environmental installations. These incentives reward homeowners who invest in renovations that benefit both their households and their communities. With careful planning, you can turn your renovation costs into long-term savings.

Federal tax credits for home renovations

Home Accessibility Tax Credit (HATC)

The Home Accessibility Tax Credit is available to any homeowner who has made repairs designed to improve the life of any person living with a disability. The HATC allows for a claim of up to $10,000, and this tax credit is non-refundable. Starting in 2022, the maximum amount of expenses eligible for the tax credit is $20,000, providing a tax credit of up to $3,000.

Eligibility criteria for the HATC include:

  • The renovation must have the ultimate purpose of allowing the person to be more mobile in their home
  • The repair must be designed to reduce the risk of harm to the individual in question
  • The individual must be either 65 years of age or older, or be eligible for a disability tax credit at any time during the current tax year

Qualified repairs include:

  • Handrails, balance bars
  • New door locks
  • Motion-activated lighting
  • Lowered countertops
  • Non-slip flooring
  • Touch and release infrastructure
  • Door widening
  • Wheelchair lifts and ramps

Multigenerational Home Renovation Tax Credit (MHRTC)

The Multigenerational Home Renovation Tax Credit was introduced in the 2022 Budget and is available for tax returns filed in 2023 and beyond. The credit is available for renovations made to homes to include secondary living quarters for elderly or disabled family members. The maximum credit amount is $7,500, which is a 15% reimbursement of up to $50,000 in expenses.

To receive the refund, you must meet the following criteria:

  • The qualified individual must be 65 years of age or older by the end of the tax year
  • OR the individual must be 18 years of age or older and eligible for the Disability Tax Credit
  • The renovation must create secondary housing in the primary residence
  • The expenses must be incurred after December 31, 2022

An eligible person may claim up to $50,000 of eligible expenses for one qualifying renovation completed in a tax year. When renovation expenses are shared between several people, the credit may be divided between them.

GST/HST Substantial Renovation Rebate

The GST/HST New Housing Rebate program also offers a rebate for substantial renovations to your principal place of residence. In order for renovations to qualify as “substantial,” they must exceed 90% of your home. There are numerous conditions for eligibility, such as:

  • The home must be your primary residence or the residence of a relative
  • The renovation must convert at least 90% of the living space
  • The maximum rebate amount varies by province

Provincial and municipal programs in Alberta

Residential Access Modification Program (RAMP)

The Residential Access Modification Program, also known as RAMP, provides grants to help low-income households in Alberta facing mobility challenges to modify their homes for accessibility and mobility. Those who are eligible for RAMP can receive up to $7,500 per year and up to $15,000 over a 10-year benefit period.

Eligibility criteria for RAMP include:

  • Be a Canadian citizen and have lived in Alberta for a consecutive period of 90 days
  • Have a health card (care card)
  • Meet the program criteria for individuals who are wheelchair-bound, regardless of age
  • Live with a progressive neurodegenerative disease
  • Meet the income guidelines

Clean Energy Improvement Program (CEIP) - Calgary

The Clean Energy Improvement Program (CEIP) helps homeowners pay for energy-efficient and renewable energy upgrades. It provides flexible financing so you don't have to cover the full cost up front. This program is administered by Alberta Municipalities.

Key features of CEIP include:

  • You can finance up to 100% of your project costs
  • The interest rate for 2025 is 3.75%
  • You have up to 20 years to repay your CEIP loan
  • You can receive up to a 10% rebate of your total project costs as an incentive
  • Payments are made through your property tax bill

To qualify:

  • You must own a low-rise residential property in Calgary
  • You must meet all the requirements listed in the program's Terms and Conditions
  • The total cost of your upgrades must be at least $3,000

Alberta Solar Investment Tax Credit

The Federal Solar Investment Tax Credit (ITC) is a federal tax incentive for farms and commercial properties investing in renewable energy solutions, particularly solar. By providing a 20%-30% tax credit on eligible solar installation costs, the ITC makes solar energy more affordable and accessible to Alberta's agricultural and business sectors.

However, it is important to note that the CT ITC is only available to taxable Canadian corporations and mutual fund trusts operating as REITs. Unfortunately, the CT ITC is not available to individual taxpayers or homeowners.

Home Renovation Tax Credits Application Process

Documentation and Records

Documentation is critical when claiming expenses on your tax return. You must keep detailed records of all expenses related to your qualifying renovation, including:

  • Invoices and receipts for materials
  • Invoices for professional services
  • Permit and planning fees
  • Equipment rental costs
  • Before and after photos

Doing the work yourself vs. hiring contractors

If you do the renovation work yourself, eligible expenses include the cost of building materials, supplies, equipment rentals, building plans, and permits. However, qualified expenses do NOT include the cost of your labor or tools.

If a family member performs the work or assists you, the expenses are not eligible unless the goods or services are provided by a person related to the qualified person or an eligible person, unless that person is registered for GST/HST.

Filing your tax return

To claim the HATC, you must complete Form T1 General and Schedule 12. Since this is a non-refundable tax credit, you are entitled to 15% of your renovation expenses as a reduction in your taxes.

For the MHRTC, the credit is claimed on line 45355 of your tax return. Since this tax credit is refundable, you will receive a refund if the credit you claim is more than the taxes you owe.

Special considerations for Calgary

Combining programs

Homeowners in Calgary may be able to combine multiple programs to maximize their savings. For example, you can use the Canada Greener Homes Loan together with CEIP to finance energy-efficient upgrades. It is important to check with each program to see if combining is allowed.

Property taxes and CEIP

With CEIP, payments are made through your property tax bill, which may affect your overall tax liability. The financing remains with the property—not the owner. If you sell your home, you can either pay off the remaining balance without penalty or disclose and transfer the balance to the new owner.

First-time home buyer programs

Calgary residents can also take advantage of federal first-time home buyer programs, including:

  • Home Buyers' Amount: up to $5,000 for first-time home buyers
  • Home Buyers' Plan (HBP): up to $60,000 tax-free withdrawal from RRSPs
  • First Home Savings Account (FHSA): up to $40,000 in tax-free savings

Practical tips for maximizing benefits

Planning and timing

Professional guidance ensures compliance with evolving tax rules. First-time buyers and investors benefit differently from renovation deductions. Combining several eligible projects maximizes the potential for annual savings.

Energy-efficient upgrades

Energy-efficient and accessibility upgrades often have higher levels of eligibility. Calgary's Clean Energy Improvement Program is particularly useful for large energy projects, as it offers up to 20 years of financing at competitive rates.

Professional assistance

New Homes Alberta specializes in guiding buyers and investors through these opportunities. Understanding expense deductions ensures smarter financial decisions. It is recommended to contact a qualified tax advisor or accountant to ensure you are claiming all available credits.

Common mistakes to avoid

Incorrect categorization of repairs

It is important to understand that not all home improvements qualify for tax credits. Certain repairs and home improvements will not be eligible under this tax credit, such as:

  • Landscaping or aesthetic changes
  • Appliance upgrades
  • Insulation changes (except for energy efficiency programs)
  • Wheelchairs and walkers
  • Fire alarms and carbon monoxide detectors
  • New roof, windows, or flooring (except for accessible modifications)

Improper record keeping

Without proper documentation, your claims may be rejected. Keep all receipts, contracts, and photos of your renovation project. CEIP also requires a pre- and post-project EnerGuide rating.

Missing deadlines

Each program has its own specific deadlines and requirements. CEIP, for example, has limited application periods and applications are generally accepted on a first-come, first-served basis. It is important to stay informed about program opening dates and have your documentation ready.

Home Renovation Tax Credits represent a significant opportunity for Calgary homeowners to reduce the cost of home improvements while increasing accessibility, energy efficiency, and overall property value. Federal programs such as HATC and MHRTC provide substantial tax credits for qualifying renovations, while local initiatives such as Calgary's CEIP offer innovative financing options for energy upgrades. The key to success lies in understanding eligibility criteria, maintaining proper records, and strategically planning renovations to maximize available benefits. With careful planning and professional guidance, homeowners can turn necessary home improvements into valuable tax savings opportunities, creating more affordable and sustainable living spaces for themselves and their families.