Is a Kitchen Renovation Tax Deductible in Canada?

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For many homeowners, the kitchen is the heart of the home. Considering that the kitchen is the most used room in the entire house, it needs special attention. Yes, we’re sure you keep your kitchen clean, but if you examine it closely, does it needs a makeover, overhaul or renovation? Is the wear and tear of using the same room for years beginning to show?
If you’re thinking that a kitchen renovation project seems like it requires a lot of coordination and planning, you’re absolutely right. Besides the expenses associated with a kitchen renovation project, the whole process can be inconvenient (especially when you do not have another place to prepare meals). You will have to decide what kind of renovations you need in your kitchen, as well as set and stick to a budget. Then you’ll need to choose a good design studio to get the job done right in addition to selecting the color scheme, appliances, cabinetry, flooring, backsplash and other features. Decisions, decisions and even more decisions!
While a kitchen renovation is a major undertaking that demands time and concentration, the rewards are well worth the inconvenience because the kitchen will be customized to you and how you use the space.

Before contemplating a kitchen renovation, homeowners should know that there are certain scenarios when they could claim a tax deduction. Here is what you need to know about claiming tax deductions for kitchen renovations.

Tax Deduction on Kitchen Renovation

The Canada Revenue Agency (CRA) does not offer many options to claim tax deductions for the investments associated with kitchen renovations. Until the 2017 tax year, homeowners used to be able to claim The Healthy Homes Renovation Tax Credit, but it has been replaced with Home Accessibility Expenses (HAE). This deduction is available to all Canadian homeowners, including seniors over age 65. To claim HAE in your home, you must own the house and should be living in it.

Home Accessibility Expense

Deductions for HAE can apply to your kitchen renovations if they increase the accessibility of your kitchen, but not if they increase the overall value of your home. For instance, you can lower the height of your cabinets so that a person in a wheelchair can reach them easier.

Home Office

The CRA also allows a tax deduction for kitchen renovation if you use your property for business purposes, or have a permissible office in your house. However, to receive the tax deduction, homeowners need to have a contract with a registered firm or a design studio.

Renovations for a Rental Property

Homeowners can also claim for the HAE tax deduction if they have renovated a portion of their home that they rent to others.
If you run a business from your home, it’s recommended that you have a contract with a design studio to renovate your kitchen, you can’t claim on cash or unverified invoices. Contact us at (416) 679-9300 to discuss your renovation options with our kitchen renovation experts.