Quebec RénoVert tax credit to encourage residential renovation

Julie Hélène Tremblay, LL.B., M. Fisc., Senior Manager, Tax

 

Following measures adopted by previous governments, the Government of Quebec has created a tax credit for residential renovations of up to $10,000 in its 2016 budget. This credit can be added to the financial assistance for “eco-friendly” renovations available under the Rénoclimat program administered by the Energy Efficiency Agency.

Conditions of eligibility

To be eligible for the credit, an individual must incur and pay recognized expenses relating to eligible housing during the application period using the services of qualified contractors. These various elements are presented in the table below:

 

 

Eligible dwelling

To be considered eligible, the housing must be a “dwelling”:

- Located in Quebec

- Built before January1, 2016

- Owned or co-owned by the taxpayer at the time the expenses are incurred

- and it must be:

  • A primary residence (single-family home, prefabricated home, permanently located mobile home, intergenerational home, condominium or multiple-unit residential building) of the taxpayer; or
  • A cottage habitable year-round that is normally occupied by the taxpayer, including the land facilitating his enjoyment and use, but excluding adjoining structures other than the garage (which must adjoin the house or cottage).

 

Recognized work

Work must be carried out in compliance with municipal or federal laws and regulations, as well as applicable policies according to the type of work, and it must generally include:

- Insulation

- Sealing

- Installation of a green or reflective roof

- Outside doors and windows

- Heating or air conditioning system

- Water heater

- Ventilation system

- Rainwater recovery system

- System to discharge, collect or treat water in compliance with the Regulation respecting waste water disposal systems for isolated dwellings (except cottages)

- Restoration of buffer strips

- Decontamination of fuel oil-contaminated soil

- Installation of solar or wind energy devices

- Work required for land restoration

 

Application period

The credit applies to work carried out pursuant to a contract concluded after March17, 2016, and before April1, 2017, by the owner or the syndicate of co-owners, and paid for by the taxpayer, the taxpayer’s spouse, or a co-owner no later than October, 2017.

 

Qualified contractors

Any person or partnership that carries out the work and:

- Has an establishment in Quebec

- Is registered to collect the Quebec sales tax (unless a small supplier)

- Is not the owner of the dwelling or the spouse of one of the owners

- Operates at arm's length from the co-owners or their spouses (unless registered to collect the QST)

- Holds a licence issued by the RBQ (work other than residential renovation), the CMÉQ (electrical) or the CMMTQ (plumbing), if such a licence is required for such work (and the required surety bond)

 

Recognized expenses

The credit applies to expenses related to the recognized eco-friendly work, including:

- The cost of the necessary permits, including the cost of any studies carried out to obtain them

- The cost of the services rendered by the contractor

- The cost of materials and components for systems purchased after March17, 2016, that comply, as required, with the applicable energy and environmental standards and are certified as such by the contractor

- The amount of the share confirmed by the syndicate if the contract was signed by a syndicate of co-owners

- The amount of any assistance or credit (federal, provincial, municipal or other), other than assistance provided through the Rénoclimat program, a rebate on the purchase price, an insurance benefit, or any other assistance that reduces the expense amount otherwise recognized

 

 

To renovate or not to renovate?

When you start thinking about renovating, it's nice that you may benefit from some assistance. For manufacturers of eco-friendly or energy-saving materials, this is definitely a tax measure that will help them maintain or boost sales. The same goes for residential construction companies.

For owners, tax assistance can definitely help improve the value of their property or their quality of life. But even when tax credits and assistance are available, it is still important to assess whether renovating is worth it, even if the cost is lower.

For more information, visit the Revenu Québec website.

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