The Canadian Government is currently running two concurrent programs to help home owners with home renovations. These programs provide monetary incentives to home owners who perform renovations on their home, stimulating the economy by providing work for skilled trades, and benefiting the home owners by helping them increase their home value.
Retrofit Rebate Program
The first program is the Retrofit Rebate Program, in which the home owner contacts one of the Auditors listed on the Home Energy Audit Program website. The auditor performs an evaluation of where your home currently stands in terms of energy consumption and efficiency. This audit typically costs around $400, of which $150 is covered by the Government of Ontario. If you currently have a mortgage with Royal Bank of Canada (RBC), they have a program which covers the rest of the cost of the initial inspection, and unfortunately for the rest of you, they seem to be the only bank to do so. From the time of the inspection, home owners are given 18 months to complete any and all eligible energy efficiency renovations and have the auditor return to do the final inspection. Once the final inspection is complete, you are assessed for a rebate for upwards of $10,000 in the form of a cheque, split between the Government of Ontario and the Government of Canada, which tends to take 8-10 weeks to arrive. The genious behind this program is that these subsidized renovations actually DECREASE your expenses. This income gets spent instead on paying back the loan you took out (whether it was line-of-credit, or re-mortgaging), increasing your equity and investment in your largest asset — your home.
So why, with all the other renovations available, would you choose to re-clad your home with EIFS (exterior insulation finish system)? Simply put, it has the biggest pay back. Of all the renovations, exterior insulation (the “EI” in “EIFS”) provides the largest single rebate at $3,750. Furthermore, re-cladding your walls with EIFS has the largest potential to reduce your heating bills. See Saving Money on Heating/Cooling Bills. Additionally, EIFS helps improve air sealing — potentially adding another $480 to your rebate.
Home Renovation Tax Credit (HRTC)
The second program is the Home Renovation Tax Credit (HRTC), put on by the Canada Revenue Agency. Under this program, you are reimbursed for 15% of renovations between $1,000 and $10,000, for up to $1,350 [($10,000 ? $1,000) × 15%] on renovations done between January 27th, 2009 and February 1st, 2010. While the math may seem funny, it is nonetheless real money you get back. This money comes back to you in the form of a tax credit.
Simply keep your receipts/invoices for the renovations you had done (making sure that it is first eligible under the program), and present it to your accountant when you have your personal income taxes done.
Total Rebates and Credits
For the average $15,000 home EIFS renovation in Toronto, most home owners are looking at getting back $5,100 (plus possibly air sealing), putting the actual cost around $10,000. Factor in the increase in your home’s value and the money you save on heating/cooling bills and only a fool wouldn’t take advantage of this opportunity.