Can you claim home renovations on your taxes? Home renovations are an exciting process. Renovations grant the opportunity to customize your home to create your ideal space. Have you been staring at your outdated knobs and handles, discoloured countertops, and faded floors? If so, it may be time to upgrade the value of your home with some renovating. Any type of home improvement, such as kitchen renovations, bathroom upgrades, or new roofs require an investment of work, time, and money. It’s important to go with contractors who value your time and budget, and who can advise on applicable rebate programs for your home renovations, such as the team at Craftsmen Contracting.
While you can’t write off all home improvements, some renovations are tax deductible depending on the purpose of the renovation. Modifications made to your home that make it more accessible for seniors and people with disabilities or the installation of solar panels to decrease your greenhouse gas emissions are all eligible for tax deductions and credits.
Are Aesthetic Renovations Tax Deductible?
While home improvements such as new kitchen cabinets and updated flooring provide certain tax benefits, they are typically not tax deductible. Homes being used as personal residences, are not eligible for tax deductions when it comes to aesthetic renovations. However, as home improvements such as kitchen renovations add significant value to your home, they do possess certain tax benefits.
Renovating your home can reduce the amount of taxes you have to pay when you sell your home at a profit. The tax benefit of home renovations lies in the homeowner’s tax basis. The tax basis is the amount of your investment in your home for tax purposes. It’s calculated by adding the price you paid for the home plus the cost of any home improvements made since. The greater the basis, the less profit you’ll receive when selling, making you eligible for tax benefits. So, keep track of the cost of your home improvements. While they may not be eligible as a tax deductible, they could increase your earnings when it comes time to sell your property.
Home Office Deductions
Now, if you work from home, you may be eligible for a home office deduction. To qualify, you must have a legitimate business and dedicate a section of your home exclusively to business use. For home improvements, the deductible will depend on the purposes of the renovations and their relation to your business. If you’re adding extra book shelves or incorporating state-of-the-art appliances to further your business from home, you could be eligible for deductions come tax time.
Renovations for Medical Purposes
While renovations done for aesthetic purposes are not tax deductible, there is a renovation tax credit available for BC seniors and residents with disabilities. Since 2012, eligible homeowners can receive a credit up to 10% (or $1,000 per year) for qualifying renovations. This is only applicable if the renovations are applied to create a safer and more accessible home for those who need it.
These types of renovations include:
- Walk-in bathtubs
- Lowering countertops and cabinets
- Widening doors and hallways for wheelchair access
- Replacing knobs with lever handles.
These types of renovations are tax deductible and you can claim them if completed after April 1st, 2012. They must have been paid out-of-pocket and not yet be reimbursed by your health insurance provider.
Energy Efficient Renovations
Home renovations that make your property more energy efficient are eligible for tax credits and rebates. The 2021 Greener Homes Grant in Canada offers a $5,000 rebate to retrofit your home and make it more energy efficient, in their effort to decrease the nations greenhouse gas emissions.
Installing solar panelling to your roof, upgrading your furnace, or utilizing ENERGY STAR appliances are eligible for tax credits and rebates. These types of upgrades also save you money in the long run by decreasing your hydro costs. Renovation contractors in Vancouver, such as Craftsmen Contracting, can help you earn up to $9,800 in rebates with their home renovation rebate program. Through upgrading your home to be more energy efficient, you not only save money, but the planet too.
Home Renovations in Vancouver
It’s important to team up with a trustworthy and accountable contracting company. At Craftsmen Contracting, we provide reliable and quality home improvement services throughout Metro Vancouver and the Lower Mainland. As your renovation contractor, we will provide a streamlined renovation process from start to finish. Assisting with the design creation, construction, and finishing phases of your home improvement to bring your vision to life.