A good investment in a renovation should increase the value of your home by at least the amount of money you spent. Before you plan any improvements, understand what does and does not add value to your home.
5 renovations that usually add value
1. Investments in more efficient use of energy
Tip: Look for government programs that help reduce the cost. |
60% |
|---|
| 2. New or improved kitchens and bathrooms |
75-100% |
|---|
| 3. Low-cost improvements – Painting, new wallpaper, new rugs |
50-100% |
|---|
| 4. New windows or doors |
50-100% |
|---|
| 5. Basement renovation |
50-75% |
|---|
*The percentage of your cost that you may recover when you sell your home
Source: Appraisal Institute of Canada
3 upgrades that usually don't add much value
| 1. Costly landscaping |
25-50% |
|---|
| 2. Spa style shower systems |
36% |
|---|
| 3. Swimming pool |
0-25% |
|---|
*The percentage of your cost that you may recover when you sell your home
Source: Appraisal Institute of Canada
Are there lots of homes being torn down in your area? If so, it may not be worth it to do costly renovations. Buyers who are going to tear down your house will have no interest in the building — just in the land.
Don't forget the HST
When you're budgeting for home renovations, don't forget to take into account the HST you'll have to pay on them.
This one-time non-refundable tax credit is for qualifying home renovations made between January 28, 2009 and January 31, 2010. If you qualified for this tax credit but forgot to claim it on your 2009 tax return, you can claim now. File a T1-ADJ form to request an adjustment to your 2009 income tax return.
What you can claim
You can claim 15% of qualifying expenses that cost more than $1,000 but less than $10,000. A maximum of $1,350 for each family applies. Qualifying expenses include the cost of labour, building materials, fixtures and equipment rental.
Learn more about renovations
Find information on a wide range of renovation topics from finding a contractor to home maintenance checklists at Canada Mortgage and Housing Corporation.