If you’re planning a kitchen tear-out, a basement build, or a full home renovation in Calgary, the question of whether any of it comes back to you on your tax return is a fair one. A reno is a big number. If even part of it is recoverable, that changes the math.
The honest answer is that most home renovations in Canada are not tax deductible. The Canada Revenue Agency treats personal home improvements as personal expenses, the same way it treats new furniture or a fresh coat of paint. But there are real exceptions, and several of them apply to Calgary homeowners. Federal tax credits, Alberta programs, and a handful of situations where renovation costs reduce taxable income directly. Knowing which ones apply to your project can save you anywhere from a few hundred dollars to over $7,000.
Kay2 Contracting has been doing kitchen, bathroom, basement, and full home renovations across Calgary since 2009. Over the years we’ve helped clients structure projects in ways that line up with the federal credits and Alberta programs that actually exist. We put this guide together because most of the renovation tax info online is generic and not written for Calgary homeowners.
This guide walks through every credit, rebate, and deduction available to Calgary homeowners in 2026. It’s written in plain language, with sources from the CRA and the City of Calgary. None of this is tax advice. For your specific return, talk to a qualified accountant.
The short answer
Most personal home renovations in Canada are not tax deductible. The CRA’s general position is that improvements to your principal residence are personal expenses and they don’t reduce your taxable income.
That said, here’s where renovations can give you something back at tax time:
- Multigenerational Home Renovation Tax Credit (MHRTC) for adding a secondary suite for a senior or disabled family member
- Home Accessibility Tax Credit (HATC) for accessibility renovations
- Medical Expense Tax Credit for renovations prescribed for a medical condition
- Rental property renovations (deductible against rental income)
- Home office and business-use renovations (partial deduction)
- GST/HST New Housing Rebate for substantial renovations
- Calgary’s Clean Energy Improvement Program (CEIP) financing
- CMHC Eco Improvement mortgage insurance refund
We’ll cover each one in detail below, with current 2026 dollar amounts and links to the official CRA pages.
Federal tax credits for home renovations in Canada
Multigenerational Home Renovation Tax Credit (MHRTC)
The MHRTC is the biggest federal credit available for renovations right now, and it’s the one most Calgary homeowners overlook. It’s a refundable credit, which matters. Refundable means you get the money back even if you don’t owe tax.
How it works: if you build a self-contained secondary suite in your home for a qualifying senior (65+) or an adult eligible for the Disability Tax Credit, you can claim 15% of your renovation costs up to $50,000. That works out to a maximum credit of $7,500.
The qualifying individual has to be a parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew of you or your spouse. They have to live in the suite (or intend to live in it) within 12 months of the renovation finishing. The suite has to be self-contained, which means a separate entrance, kitchen, bathroom, and sleeping area.
Only one MHRTC claim per qualifying individual in their lifetime. So if your aging parent moves in with you and you build them a suite, that’s a one-time credit.
This credit lines up well with basement suite conversions and home additions. If you’re already thinking about adding a secondary unit for a family member, the MHRTC can offset a meaningful chunk of the cost. Kay2 has built a number of secondary suites in Calgary basements and additions specifically structured to qualify under the MHRTC, and we work with your accountant to make sure the documentation lines up. Full eligibility rules are on the CRA’s MHRTC page.
Home Accessibility Tax Credit (HATC)
The HATC is a non-refundable credit (it reduces tax owing, but you don’t get a refund beyond zero). It’s worth 15% of eligible accessibility renovation costs, up to $20,000 in expenses per year. Maximum credit: $3,000.
To qualify, the person living in the home has to be 65 or older by the end of the tax year, or eligible for the Disability Tax Credit. The renovation has to either improve accessibility or reduce the risk of injury.
Eligible work includes:
- Walk-in tubs and curbless walk-in showers
- Grab bars and reinforced walls for grab bars
- Wheelchair ramps and lifts
- Wider doorways and hallways
- Lever-style door handles and faucets
- Non-slip flooring
- Lowered countertops and accessible cabinetry
- Stair lifts
A few of these line up directly with bathroom renovations. Curbless showers, walk-in tubs, grab bars, and wider doorways are exactly the kind of work Kay2 does on accessible bathroom builds across Calgary. We can structure a bathroom renovation to maximize the HATC-eligible portion. Full details are on the CRA’s home accessibility expenses page.
Medical Expense Tax Credit (METC)
Separate from the HATC, the Medical Expense Tax Credit lets you claim renovation costs that were prescribed by a doctor as medically necessary. This is narrower than the HATC. The renovation has to be specifically prescribed for a medical condition, and it can’t be the kind of thing that would normally increase the home’s value.
Common METC-eligible renovations:
- Modifications for severe mobility impairments
- Air filtration or ventilation systems prescribed for severe asthma or allergies
- Lifts and elevators prescribed for medical mobility needs
Important update for 2026: you can no longer stack the HATC and METC on the same renovation expense. You have to pick one. Talk to your accountant about which gives you the bigger benefit on your specific return.
GST/HST New Housing Rebate (substantial renovations)
If your renovation qualifies as a “substantial renovation” under the CRA’s definition, you may be eligible for a GST/HST New Housing Rebate. Substantial means 90% or more of the interior of the home is removed or replaced. This is a high bar. Most renovations don’t hit it. But full gut jobs and tear-down rebuilds often do.
The rebate refunds part of the GST you paid on the renovation. Worth checking with your accountant if you’re doing a complete interior rebuild.
Renovations on rental and income properties
This is where the rules change in your favour. If you own a rental property in Calgary, the CRA treats renovation costs differently depending on whether they’re current expenses or capital expenses.
Current expenses (deductible right away)
These are repairs and maintenance that keep the property in working condition without improving it. They’re fully deductible against rental income in the year you incur them.
- Patching drywall and repainting
- Replacing broken fixtures with similar ones
- Repairing a leaky roof
- Fixing existing plumbing
- Touch-up flooring repair
Capital expenses (depreciated over time)
These are improvements that extend the useful life of the property or increase its value. You claim them through Capital Cost Allowance (CCA) over multiple years rather than all at once.
- New kitchen install
- Bathroom rebuild
- New roof (full replacement, not repair)
- Adding a basement suite
- Window replacement
- Major flooring replacement
The line between current and capital is sometimes fuzzy, and the CRA uses a few tests: did the work restore the property to its original state (current) or improve it beyond that (capital)? Did it use better materials than the original (capital)? Was it part of a larger renovation project (often capital)?
This matters because owners of rental properties in Calgary doing kitchen or bathroom upgrades on their units can recover a significant portion of the cost over time. Kay2 does a lot of rental property renovations across Calgary and we structure invoicing so the current vs capital split is clear from the start. Talk to your accountant before starting the work so you know how to track expenses properly.
Home office and business-use renovations
If you run a business out of your home, or you’re self-employed and use part of your house exclusively for business, you can deduct a portion of home expenses. Renovations that affect the business-use area can be deducted proportionally.
The proportion is usually based on square footage. If your home office is 200 square feet in a 2,000 square foot home, that’s 10%. Renovations to the office space itself are typically 100% deductible. Renovations to shared spaces (like a new furnace or roof) are deductible at the business-use percentage.
This is most useful for renovations that include a dedicated home office build-out. Built-in desks, custom cabinetry, soundproofing, and electrical upgrades to handle a business setup all count. Kay2 has built dedicated home office spaces into a number of Calgary renovations and full custom builds.
Calgary and Alberta programs for home renovations
Federal credits aren’t the only thing on the table. Calgary and Alberta have their own programs that can offset renovation costs, especially for energy-efficient upgrades.
Clean Energy Improvement Program (CEIP)
CEIP is run by the City of Calgary and lets homeowners finance energy-efficient renovations through their property tax bill. You’re not getting a deduction, but you’re getting low-interest financing on upgrades that you’d otherwise have to pay out of pocket. Eligible work includes solar panels, insulation upgrades, window replacements, high-efficiency furnaces, water heating upgrades, and heat pumps.
Calgary’s CEIP can finance up to 100% of project costs to a maximum of $50,000 per home. Repayment happens through a separate line on your property tax bill over 5 to 25 years. This is a great option if you’re doing a major envelope upgrade and you want to spread the cost out without taking on a separate loan.
Home Upgrades Program
The Home Upgrades Program offers free energy-efficiency upgrades to qualifying Calgary and Canmore households. Income-tested. Eligible work includes new furnaces, insulation upgrades, and air sealing. If you’re a homeowner who meets the income thresholds, this can be one of the most generous programs available.
CMHC Eco Improvement refund
If you have a CMHC-insured mortgage and you complete at least $20,000 worth of qualifying energy-efficient renovations, CMHC will refund up to 25% of your mortgage loan insurance premium. Depending on the size of your mortgage, that can work out to anywhere from $2,000 to $5,000 or more. Worth checking if you’re already planning energy upgrades.
What’s NOT tax-deductible
Here’s the part most homeowners don’t want to hear. The vast majority of typical Calgary home renovations don’t qualify for any deduction or credit. That includes:
- Standard kitchen renovations (unless you’re adding a secondary suite, accessible features, or it’s a rental)
- Standard bathroom renovations (unless they include accessibility upgrades)
- Cosmetic updates like paint, flooring, and trim
- Pools, hot tubs, and outdoor entertainment areas
- Landscaping and yard work
- Garage builds and detached structures (unless used for business)
- Basement developments that aren’t self-contained suites for qualifying family members
- Roof replacements on principal residences (unless the roof was prescribed for medical reasons)
That doesn’t mean these renovations are bad investments. They add value to the home, they improve how you live in the space, and the resale benefits are real. But the CRA isn’t going to give you anything back at tax time.
Records you need to keep
Whether your renovation is deductible or not, keeping good records is worth the effort. The CRA can ask you to substantiate any claim, and proper documentation also helps with capital gains calculations if you ever sell a rental or convert your home.
Keep these for any renovation:
- Original contractor invoices showing the work, the date, the cost, and the contractor’s name and GST number
- Material receipts if you bought any directly
- Permit documents from the City of Calgary
- Before and after photos
- For accessibility renos: prescription or letter from a doctor if applicable
- For MHRTC: documentation showing the qualifying individual’s age or DTC eligibility, and proof the suite is self-contained
- For rental properties: separate ledger of repairs vs improvements
The CRA recommends keeping tax records for at least six years after filing. For renovations on rental properties, keep them as long as you own the property plus six years.
How to maximize your renovation tax savings in Calgary
If you’re planning a renovation and you want to make the tax side work as hard as possible, a few things to think about before the project starts:
- Talk to your accountant before you sign a contract, not after the work is done. Some claims need specific documentation that has to be set up at the start.
- If a senior or disabled family member is moving in, see if your project can be structured as a qualifying MHRTC renovation. The credit can be worth up to $7,500.
- Bundle accessibility upgrades into a larger bathroom renovation. The HATC covers the accessible portion.
- Look at energy-efficient upgrades alongside aesthetic ones. Programs like CEIP and the CMHC refund can reduce the net cost meaningfully.
- If you own a rental, time renovations for tax efficiency and clearly separate current expenses from capital expenses on your books.
- Save every receipt and every invoice, even if you’re not sure whether it’ll qualify.
Plan your Calgary renovation with Kay2
Whether your project qualifies for a tax credit or not, the work itself still has to be done right. Kay2 Contracting has been doing kitchen, bathroom, basement, and home renovations across Calgary and the surrounding areas since 2009. We’re members of BILD Calgary Region, fully licensed, and fully insured. If you’re planning a multigenerational suite for the MHRTC, an accessible bathroom for the HATC, a rental property renovation, or a full custom home build, Kay2 can help you plan and execute.
Frequently asked questions
Q: Are kitchen renovations tax deductible in Canada?
A: Standard kitchen renovations on your principal residence are not tax deductible. There are exceptions: if the kitchen is part of a self-contained suite for a qualifying family member under the MHRTC, if it’s in a rental property (deductible against rental income), or if it includes accessibility features under the HATC.
Q: Are bathroom renovations tax deductible in Canada?
A: Most bathroom renovations on your principal residence are not deductible. Accessible bathroom upgrades like walk-in tubs, curbless showers, and grab bars qualify for the Home Accessibility Tax Credit if the homeowner is 65+ or eligible for the Disability Tax Credit. Bathrooms in rental properties are deductible as either current or capital expenses.
Q: Can I claim a basement renovation on my taxes in Canada?
A: Most basement developments are not deductible. The exception is a self-contained secondary suite built for a qualifying senior or disabled family member, which can qualify for the Multigenerational Home Renovation Tax Credit (MHRTC) up to $7,500.
Q: How much can I claim under the Multigenerational Home Renovation Tax Credit?
A: Up to 15% of $50,000 in eligible expenses, for a maximum credit of $7,500. The credit is refundable, meaning you receive the full amount even if you don’t owe tax. Only one claim per qualifying individual per lifetime.
Q: What energy-efficient renovation programs are available in Calgary?
A: Calgary’s Clean Energy Improvement Program (CEIP) finances up to $50,000 in energy-efficient upgrades through your property tax bill. The Home Upgrades Program offers free upgrades to qualifying low-income households in Calgary and Canmore. CMHC Eco Improvement refunds up to 25% of your mortgage insurance premium for qualifying energy-efficient renovations.
Q: Do I need receipts to claim a home renovation tax credit?
A: Yes. The CRA can ask you to substantiate any claim. Keep contractor invoices showing the work, date, cost, and contractor’s GST number. Keep material receipts and permit documents. Hold these for at least six years after filing.
A note on tax advice
This guide is for general information. Tax rules change, and how they apply to you depends on your specific situation. Before claiming any credit or deduction discussed above, talk to a qualified Canadian tax accountant. The CRA also offers official guidance and the ability to call directly with questions.
Start planning your Calgary renovation with Kay2
If you’re ready to talk about your project, whether it qualifies for a tax credit or not, Kay2 will come see your space and walk you through what’s possible. Free consultation, no pressure.
