On Tuesday, January 27th, the Federal Government released its fiscal 2009-2010 budget. As you are likely aware, it included a number of actions that will be taken to stimulate the home improvement industry.
Please find below details about the new Home Renovation Tax Credit (HRTC) to aid you and your family when talking steps to improve your home. For further information, please visit the Government of Canada website.
Home Renovation Tax Credit (HRTC):
The HRTC will provide a temporary 15-per cent income tax credit on eligible home renovation projects for work performed, or goods acquired, after January 27, 2009 and before February, 1, 2010, for agreements entered into after January 27, 2009. The 15% credit may be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, and will provide up to $1,350 in tax relief.
A dwelling will generally be considered eligible if it is used for personal purposes. This will include houses, cottages and condominium units.
The HRTC can be claimed for renovations and alterations to a dwelling, or the land on which it sits, that are enduring in nature. In addition to products and materials, costs associated with such projects will also be eligible for the credit, including permits, professional services, cost of labour, equipment rentals and incidental expenses.
Routine repairs and maintenance normally performed on an annual or more frequent basis (e.g. cleaning, lawn fertilization and snow removal) will not qualify for the credit. The cost of purchasing furniture, appliances, audio-visual electronics and construction equipment will not be eligible.
Examples of HRTC-eligible expenditures include:
- renovating a kitchen, bathroom or basement
- new carpet or hardwood floors
- building an addition, deck, fence or retaining wall
- a new furnace or water heater
- painting the exterior or interior of a house
- resurfacing a driveway
- laying new sod.
Examples of ineligible expenditures include:
- purchases of furniture and appliances
- purchases of tools
- carpet cleaning
- maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, pool cleaning).
NOTE: Increasing Residential Energy Efficiency
The HRTC will complement support provided by the Government for Canadians to undertake energy-saving improvements to their homes. Federal grants paid through the ecoENERGY Retrofit program will not reduce the value of claims made for these expenditures under the HRTC.
The ecoENERGY Retrofit program provides home and property owners with grants of up to $5,000 to offset the costs of making energy efficient improvements. For more information on ecoENERGY programs, visit www.ecoaction.gc.ca