New Tax Credit Makes Home Renovations More Affordable
Legislation for the new Saskatchewan Home Renovation Tax Credit was introduced today, fulfilling the government’s first commitment in the recent election campaign.
“This new tax credit will make the cost of home renovations more affordable and will help drive Saskatchewan’s economic recovery,” Deputy Premier and Finance Minister Donna Harpauer said. “It’s part of our government’s plan for a strong recovery and a strong Saskatchewan.”
Under this non-refundable tax credit, Saskatchewan homeowners may save up to $2,100 in provincial income tax by claiming a 10.5 per cent tax credit on up to $20,000 of eligible home renovation expenses. Eligible expenses include the cost of labour and professional services, building materials, fixtures, equipment rentals and permits.
To qualify, renovations must be to a Saskatchewan taxpayer’s principal residence, which must be located in Saskatchewan. Renovation expenses must be incurred between October 1, 2020 and December 31, 2022, and the renovation must be substantially completed by December 31, 2022.
“This new tax credit is an incentive to spend, build and hire,” Harpauer said. “Combined with the PST reduction on new home construction in the June 2020 budget, this new credit will increase construction activity in the province, create jobs, and help drive Saskatchewan's economic recovery.”
Eligible expenses include permanent additions to the home but not items such as furniture, appliances, hot tubs, tools or maintenance services such as carpet or furnace cleaning.
Taxpayers should claim the credit for eligible renovations on their 2021 and/or 2022 personal income tax returns.
Total qualified expenses incurred between October 1, 2020 and December 31, 2021 in excess of $1,000 (base amount), but not more than $12,000 can be claimed on 2021 tax returns (maximum claim of $11,000 for 2021).
Total qualified expenses incurred between January 1, 2022 and December 31, 2022 in excess of $1,000 (base amount), but not more than $10,000, can be claimed on 2022 tax returns (maximum claim of $9,000 for 2022).
The tax credit can be split among eligible family members, but the total amount claimed cannot exceed the maximum allowable.
The Saskatchewan Home Renovation Tax Credit will be administered by the Canada Revenue Agency (CRA) as part of the Saskatchewan personal income tax system. CRA will develop the necessary forms and filing instructions in the coming months.
The new tax credit is estimated to cost $124 million over two years.
For more information about the tax credit, including more examples of eligible renovation expenses, please visit www.saskatchewan.ca/home-renovation-tax-credit or call 1-800-667-6102 (toll free), or email [email protected]