Planning renovations over the next twelve months? You can get back $1,350 in tax relief – Every little bit helps
February 1st, 2009 Categories: Home Maintenance, Mortgages, Economics, Finance, Real Estate News
Last week’s Federal Budget 2009 proposes a temporary Home Renovation Tax Credit (”HRTC”), which will provide a 15% non-refundable income tax credit on eligible home renovation expenditures made after January 27, 2009 and before February 1, 2010, for agreements entered into after January 27, 2009.
The credit may be claimed on the 2009 tax return for the portion of eligible expenditures over $1,000 but less than $10,000, and will provide up to $1,350 in tax relief (i.e., 15% multiplied by ($10,000 minus $1,000)).
Family members will be subject to a single limit based on their pooled expenditures. For this purpose, a “family” will generally be considered to consist of an individual, his or her spouse or common-law partner, and their children who were, throughout 2009, under the age of 18 years. Eligible dwellings are generally restricted to personal-use homes including houses, cottages, and condominium units.
What expenses are eligible?
The tax credit is for “enduring renovations and alterations”. Individuals will need to keep receipts.
Eligible: renovating a kitchen, bathroom or basement, purchasing new carpet, hardwood floors, a new furnace or water heater, building an addition, deck, fence or retaining wall, painting the interior or exterior of a house, resurfacing a driveway, or laying new sod. Most costs associated with such projects will be eligible for the credit, including the cost of labour and professional services, permits, building materials, fixtures, equipment rentals and incidental expenses.
Ineligible: routine repairs and maintenance normally performed on an annual or more frequent basis, carpet cleaning, financing costs associated with a renovation (e.g. mortgage interest costs), the purchase of furniture and appliances (e.g. a refrigerator, stove or couch), audio-visual electronics, tools or construction equipment or maintenance contracts such as furnace cleaning, snow removal, lawn care and pool cleaning.
So stop putting off doing a bit of work on that house of yours, just don’t go overboard!
This entry was posted on Sunday, February 1st, 2009 at 8:38 pm and is filed under Home Maintenance, Mortgages, Economics, Finance, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
This aspect of the budget does seem to be generating quite a bit of interest, isn’t it? Combining it with a purchase+improvements mortgage gives home buyers a real incentive to consider a purchase. Nice to see you posting again Hilary!
it would be accepted armed with pitchforks, pencils and paper outside the parliament building to force the government to open their books so voters can finally see how the government actually spend our money!
I’ve been involved in taxes for longer then I care to admit, both on the individualized side (all my employed life-time!!) and from a legal standpoint since satisfying the bar and following tax law. I’ve put up a lot of advice and rectified a lot of wrongs, and I must say that what you’ve put up makes impeccable sense. Please carry on the good work – the more individuals know the better they’ll be equipped to handle with the tax man, and that’s what it’s all about.
Thanks for the reminder, and some great advice/information on how the HRTC works. Another good article explaining the HRTC, although with a emphasis onrealty in Calgary, might be useful to some people.