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Canada's home renovation tax credit covers a range of upgrades, including pathways, new sod and professional landscape design and contractor services.

The temporary Home Renovation Tax Credit (HRTC) contained in Canada's 2009 federal budget is generating a lot of interest, but there is still confusion about what it does and does not cover.

The $3-billion program is designed to encourage Canadians to renovate and upgrade their homes by offering a 15 per cent credit on expenditures exceeding $1,000, up to a limit of $10,000, for a maximum tax credit of $1,350.

The HRTC applies to home renovation expenditures made between January 27, 2009 and February 1, 2010. This includes residential swimming pools—both inground and permanently installed above-ground—as well as hot tubs and spas permanently positioned and hard-wired to an electrical panel. Building additions, decks, fences and retaining walls are also covered.

Several landscaping upgrades also qualify, including permanent ponds and waterfalls, new sod, trees, perennial shrubs and flowers, large rocks, interlocking driveways, pathways, permanent irrigation and lighting systems, large permanent garden ornaments, garden sheds and professional landscape design and contractor services. Associated expenses, such as building permits, equipment rentals and incidental expenses, are also covered.

The following are ineligible for the HRTC: inflatable pools, 'plug-and-play' hot tubs equipped with a cord (i.e. not requiring a permanent electrical connection), lawn care, pool cleaning services, construction equipment, furniture, appliances, routine repairs and interest expenses associated with financing a renovation.