Home renovation tax credits and how to obtain them

Home renovation tax credits and how to obtain them

Did you know that there are tax credits for your renovations? If you decide to renovate your home, you may be eligible for two types of tax credits. There’s the RÉNOVERT renovation tax credit. You may also qualify for a subsidy program called RÉNOCLIMAT, which is independent of home renovation tax credits.

Renovations might interest you for a number of reasons, including limited living space, a growing family, or even just due to your changing needs. Unfortunately, each renovation comes with its share of challenges, regardless of which room you are planning to do over. This can be enough to discourage most of us from undertaking renovations, yet there is a solution to lessen the financial impact these renovations can have on your budget: home renovation tax credits.

Learn more about everything there is to know about home renovation tax credits and how to get them.

Home renovation tax credits  

Home renovation tax credits are there to improve the energy efficiency of a building and reduce the planet’s energy bill. These renovation tax credits offer numerous advantages. For instance, as a client, you can benefit from:

  • A lower hydro bill
  • Renovations to match your tastes
  • A notable increase in comfort
  • Cumulative tax credits to lower your overall renovation costs

The RÉNOVERT renovation tax credit and RÉNO-CLIMAT subsidy program

RÉNOVERT

RÉNOVERT is a home renovation tax credit available until March 31, 2019. This credit offers 20 % after the first $2,500 up to a total of $10,000. Here is a list of renovation works recognized by the RÉNOVERT credit.

Works affecting a home’s envelope:

  • Insulation using GREENGUARD or ÉcoLogo-certified insulation materials
  • Attic insulation
  • Insulating a flat roof or a cathedral ceiling
  • External wall insulation
  • Insulation of a crawl space
  • Insulation of exposed floors
  • Foundation waterproofing
  • Air sealing (walls, doors, windows and skylights, if applicable)
  • Door and window replacement with ENERGY STAR models
  • Installing a green or white roof

Works affecting a home’s mechanical systems:

  • Replacement of any indoor wood burning appliance or system (old non-compliant fireplaces) with newer appliances that adhere to the standards of the Régie de l’habitation du Québec
  • Replacement of a boiler, heat pump or oil system
  • Installation or replacement of an air conditioning system with an ENERGY STAR-approved one
  • Replacement of a water heater with an ENERGY STAR one
  • Replacement of a ventilation system

Renovation works affecting water, soil, or other renewable energy sources

  • Installation of a rainwater recovery tank
  • Riparian area restoration
  • Construction, renovation, modification or reconstruction of a wastewater disposal, collection or treatment system
  • Remediation of oil-contaminated soil
  • Solar panel installation
  • Installation of a home wind turbine

RÉNO-CLIMAT

RÉNO-CLIMAT is available until March 31, 2021 and offers a maximum refund of 20%, depending on the energy efficiency improvement percentage. Here are the steps to obtain this subsidy program:

  1. Do a pre-renovation evaluation. The cost is approximately $150, and $100 of that will be refunded once the work has been completed on time. The evaluator performs tests and sends a report with pre-reno recommendations and scoring regarding the home’s current energy efficiency.
  2. Eligible works are insulation, doors and windows, and the replacement of any mechanical systems. Here’s an example of a maximum refund:
    Insulation and foundation: a maximum of $1,625
    Rim joist insulation: a maximum of $165
    Sealing: a maximum of $490
    Heat recovery ventilation: a maximum of $490 
    Heat pump: a maximum of $650
  3. Do a post-renovation evaluation. The evaluator must pass by again after the work has been done to retest and produce a different score, depending on the level of energy efficiency improvement. This step also allows you to see where improvements have been made.
  4. Get your reimbursement at tax time, reflective of the improvement percentage between your scores pre and post-renovation. A major advantage for older homes.

In conclusion, any renovation requires a lot of planning. This means time to perform the evaluations and thoroughly prepare your project. To complete renovations by the required deadline (6 months following the contract end date) we recommend that you not put off getting started. This way you can benefit from both the tax credits and the subsidy program and lower the costs of your renovation.

Your needs can change at any moment. Take time to think it over but remember that there are ways to reduce the financial impact of your renovations. To benefit from the home renovation tax credit, any renovations you do must significantly improve your building or home’s energy efficiency.  

Happy renovating!