Owning a heritage home is more than just having a roof over your head; it’s a connection to the past, a piece of Canadian history, and a source of community pride.
Whether your home once sheltered notable Canadians or simply boasts rare architectural design, its unique character sets it apart.
However, along with the prestige of owning a heritage property come responsibilities and considerations. Let’s explore the journey of heritage homeownership and how to adequately insure it.
In this article:
- Is your property a heritage home?
- Heritage designation in Ontario
- Benefits to getting your heritage home designated
- What renovations can be made on a heritage home?
- Sales tax grants and rebates for renovations, restorations or repairs
- Insuring your heritage home
- Filing a claim for your heritage property
- How can I lower my heritage home insurance premium
Is your property a heritage home?
To find out whether a property is considered a heritage home, consult the local municipal register. The register contains a list of properties in the area that are recognized as “culturally valuable.”
What the register may include:
- Property description
- Designation status
- Find out if the property falls within a heritage conservation district
- Cultural heritage value or interest of the property.
- Historical attributes of the property
Heritage designation in Ontario
When it comes to designating a property as a heritage home in Ontario, there are no fixed qualifications based on age, previous uses, or residents. Instead, the process operates under the authority of section 29 of the Ontario Heritage Act (OHA).
The OHA allows municipalities to designate properties as having “cultural heritage value or interest.” The focus is on the property’s historical and cultural significance rather than rigid qualifications.
To designate a heritage property:
- Draft a statement of cultural heritage value and interest for the property.
- Obtain a council motion expressing the intention to designate.
- Publish an advertisement in a local publication to inform the community.
The process is straightforward and doesn’t require complex prerequisites. Once designated, your heritage home gains legal recognition and protection.
Benefits to getting your heritage home designated
Owning a heritage home provides personal satisfaction. They also often come with fascinating stories, unique architectural features, and a sense of connection to the past. But beside bragging rights and memorable dinner party conversations, there’s also tangible benefits, such as:
Property tax relief: Municipalities have the authority to pass by-laws that offer property tax relief for heritage homes under the Municipal Act, 2001. This relief typically ranges from 10% to 40%.
To be eligible for tax relief, a property must be a building, structure or a portion of a building or structure that is:
- Designated under Part IV of the Ontario Heritage Act or part of a heritage conservation district designated under Part V of the Act.
- Subject to a heritage conservation agreement for the property.
Grant programs: Local governments may provide tax-back grants specifically for heritage property owners. These grants are intended for approved alterations (renovations) that preserve the heritage character of the home.
What renovations can be made on a heritage home?
The Ontario Heritage Act grants the Ministry of Heritage, Sport, Tourism, and Culture Industries the authority to prohibit demolition or significant alterations without ministerial approval. This means, any significant restorations, repairs and renovation would need your local city’s approval in most cases.
Normally, a Municipal Heritage Committee will review an application for changes to the property and then provide advice to staff and council on major changes.
Exterior changes may have strict limitations. For instance, the color palette for painting the front of your home might be restricted. Larger renovations aimed at safety or risk reduction may not be approved if they compromise the original design’s integrity.
Renovations that commonly require heritage approval include:
- Replacing windows or doors.
- Installing skylights.
- Changing roofing materials.
- Making significant landscape alterations.
- Upgrading heating or cooling systems.
- Adding rooms or demolishing existing ones.
Basic maintenance (e.g., replacing roofing materials) may not need heritage approval.
Heritage homes often require specialized expertise and nonstandard materials. If you’re thinking of remodeling or renovating your heritage home, consider hiring a contractor experienced in heritage renovations. They can discuss limitations, costs, and preservation strategies.
A real estate lawyer can also help you understand municipal by-laws and ensure compliance.
Read more: Three ways to value your home renovations
Sales tax grants and rebates for renovations, restorations or repairs
Sales tax rebates are refunds or reductions on the sales tax (such as the Goods and Services Tax or Harmonized Sales Tax) paid on eligible heritage-related expenses.
These grants are typically aimed at encouraging the preservation of historic property and ensuring that necessary work is carried out.
Eligible expenses may include:
Materials: The cost of materials used in restoration, such as traditional building materials (e.g., wood, stone, lime mortar) that maintain the historical integrity of the property.
Architectural features: Expenses related to restoring or replicating architectural features (e.g., ornate moldings, stained glass windows, decorative ironwork).
Specialized craftsmanship: Payments to skilled artisans or craftsmen who specialize in heritage restoration work (e.g., carpenters, masons, stained glass artists).
Historically accurate fixtures: Costs associated with installing historically accurate fixtures, lighting, or hardware.
Related: 10 home renovations you should tell your home insurance company about
Insuring your heritage home
Insuring heritage properties can also be more complex due to their unique characteristics and potential risks.
Heritage homes tend to be more expensive to insure because of the repair and maintenance required. These homes were not necessarily built to meet today’s building and safety standards.
They also pose challenges due to dated wiring, roofs, plumbing, poor sewer backups, and heating systems.
Insurers are generally more willing to cover newer builds that are well-constructed and well-maintained.
Related: Top 3 big ticket home maintenance projects and their impact on your home insurance
Filing a claim for your heritage property
If your heritage property suffers significant damage, the claims process becomes more intricate. Insurers calculate the replacement cost for rebuilding the property, considering its historic significance, special materials, and unique features.
Heritage property experts may consult and appraise the building, and specialty contractors might be involved in recreating specific features. Because of the heritage designation, any repairs must use materials similar to the original ones. Sourcing these specific materials can be costly. If you file a claim, the insurer will face higher repair costs, leading to increased premiums.
Replacement cost vs. Actual cash value
Replacement cost coverage requires an insurance appraisal of the building beforehand. It allows for the property to be repaired or replaced with items of similar kind and quality, up to the amount specified in the policy. There’s no deduction for depreciation.
For example, if your four-year-old antique chandelier is damaged, the claims payment will allow you to replace it with a similar antique chandelier.
Actual cash value (ACV) considers depreciation when calculating a home insurance claim. It provides an amount based on the current value of items in similar condition to the ones you lost. Depreciation is factored into the payment.
For example, if your six-year-old hardwood flooring is damaged, the payout will reflect its current value in used condition.
You may need to cover the difference between the insurance payout and the cost of a brand-new item if you choose to replace lost items with new ones.
It’s important to understand what to expect if the building were to be completely or partially destroyed by an insured peril (windstorm, tornados, earthquakes, etc.) You should speak with your insurance agent or broker about the basis of their claims settlement.
Read more: Replacement cost vs. Actual cash value explained
Insurance premiums shouldn’t increase due to a heritage designation alone
While insurance companies may raise premiums for older buildings based on factors like outdated wiring or old heating systems, the designation itself should not impose additional requirements on insurers or impact premiums.
Some companies do choose not to insure buildings over a certain age, but this decision is not directly tied to heritage designation.
Quick Tip: Add a ‘by-law’ endorsement coverage
Some insurance companies offer a special type of coverage called “by-law endorsement.”
This coverage protects against new by-laws that would increase the cost of rebuilding or repairing a dwelling after an insured loss.
By-law endorsement ensures that any additional costs arising from updated building specifications or regulations are covered.
How can I lower my heritage home insurance premium?
When it comes to insuring a heritage home in Canada, there are several strategies you can consider to potentially lower your insurance premiums:
Maintain your heritage home: Keep your heritage home well-maintained and thoughtfully renovated. Regular maintenance helps sustain its authenticity and reduces the risk of damage, which can positively impact your insurance premium.
Understand your heritage home’s unique features: Record the unique details and features of your heritage property. This information can help insurance providers accurately assess your home and offer a more competitive premium.
Reduce risk factors: Install smoke detectors, fire alarms, and burglar alarms. Following relevant building codes for your property can help reduce the risk of damage and potential claims.
Make modifications: Replace knob-and-tube electrical wiring with modern wiring, upgrade your roof and routinely check your heating and plumbing systems.
Consider deductibles: Increasing your deductible (the amount you pay out of pocket before insurance kicks in) can lower your premiums. Evaluate what you can afford and adjust your deductibles accordingly.
Compare insurance options: Comparing rates from various providers guarantees that you’re getting the best coverage for your specific heritage home at the lowest price.
Getting the right insurance protection for a heritage home involves unique considerations. Consulting with an insurance representative who specializes in heritage properties can help tailor coverage to meet your specific needs while keeping premiums manageable.
Read next: 7 ways to save on your home insurance
