Starting in 2025, Canadian homeowners can benefit from the $7,500 Home Renovation Credit, a government-backed initiative designed to ease renovation costs.
Whether upgrading your home for energy efficiency or adding modern conveniences, this credit offers substantial financial relief.
Let’s explore how you can claim the credit, who qualifies, and ways to maximize your savings.
What is the $7,500 Home Renovation Credit?
The Canada Home Renovation Credit is a one-time tax credit available to Canadian homeowners. It supports substantial renovations to primary residences, encouraging energy-efficient upgrades and enhancing overall livability.
Eligible projects range from major kitchen remodels to insulation improvements. Cosmetic updates like painting and furniture replacements, however, don’t qualify.
Eligibility
Homeownership
Applicants must own and reside in the home being renovated. Secondary properties and rental homes are excluded.
Citizenship or Residency
Only Canadian citizens or permanent residents qualify. Temporary workers or international students are not eligible.
Property Tax Compliance
Ensure all property taxes are paid. Unresolved debts with the Canada Revenue Agency (CRA) may lead to disqualification.
Eligible Renovations
Projects must offer long-term value or improved energy efficiency, such as:
- Kitchen and bathroom upgrades.
- Energy-efficient enhancements (windows, insulation, solar panels).
- Structural changes (home additions, basement finishing).
- Essential system upgrades (electrical and plumbing).
Cosmetic-only changes, such as painting, don’t qualify.
How to Claim the Credit
Step 1: Gather Documents
Prepare essential paperwork, including:
- Receipts and invoices for completed work.
- Proof of payments (credit card statements, bank records).
- Permits for significant renovations, if required.
Step 2: Log In to the CRA Website
Access the CRA’s official site and log into your account. If you’re a new user, register for a CRA account before proceeding.
Step 3: Complete the Application
Fill out the Home Renovation Credit form, providing:
- Renovation details, costs, and project types.
- Copies of supporting documents (invoices, permits, etc.).
- Bank information for direct deposit.
Step 4: Submit and Review
Check the application for errors before submission. Missing or incorrect details can delay the process.
Step 5: Await Approval
The CRA typically processes claims in 4–8 weeks. Respond promptly if additional information is requested.
Step 6: Receive the Credit
Once approved, the CRA will deposit the $7,500 credit directly into your bank account within 2–4 weeks.
Additional Savings Opportunities
While the $7,500 credit is a significant boost, combining it with other programs can help maximize your savings.
Combine with Other Incentives
Programs like the Canada Greener Homes Grant (up to $5,000 for energy-efficient upgrades) and regional eco-retrofit programs may offer additional rebates.
Leverage Tax Deductions
If you operate a home business, renovations to workspaces might be deductible. Consult a tax professional to explore this option.
Tips for Success
- Plan Ahead: Prioritize renovations with the most financial and functional benefits.
- Track Everything: Keep detailed records of expenses, payments, and project timelines.
- Consult Professionals: Seek advice from tax experts or contractors for accurate budgeting and compliance.
The $7,500 Home Renovation Credit is an excellent opportunity for Canadian homeowners to upgrade their living spaces while offsetting costs.
By understanding eligibility requirements and following the application process, you can unlock significant savings for your next renovation project.
