Home Renovation Tax Credit – Save While You Can
Tags: economic stimulus, home renovation, hrtc, incidental expenses, investing in canada, maximum credit, renovation costs, tax credit, taxpayers
As I have said before, home renovations are smart investment in the long term value of your home. Recently in accordance to economic stimulus and encourage investing in Canada’s housing stock, Budget 2009 proposed a temporary Home Renovation Tax Credit (HRTC).
HRTC will apply to eligible home renovation expenses for work performed, goods acquired after January 27th 2009 until February 1, 2010. The nature of the credit is to provide an incentive for Canadians who decide to undertake new renovations or accelerate any plans they made for the future.
Now HRTC works by you claiming the 15% credit on the portion of expenses exceeding $1,000 to a maximum of $10,000. This means that the maximum credit received is $1,350.
With the HRTC you are able to claim it on expenses that occur on one or more of your homes; whether you do some work at your house or cottage, it can all be totaled for the credit claim.
The renovation costs with expenses which involve you acquiring building permits, professional services, equipment rentals and incidental expenses are eligible for credit. This means that if you are working on a project such as finishing a basement and require any of the expenses I mentioned, you are eligible for the credit.
Taxpayers can claim the HRTC when filing their 2009 tax return, however the eligibility for the HRTC will be family based. In this case, a family will generally consist of an individual, and if applicable the individuals spouse or common-law partner.
Now I did say that in order to claim the HRTC you have to do an “eligible home renovation”. An example of this would be renovation a kitchen, bathroom or basement; painting your house; adding carpet or hardwood, etc.
To further clarify the do’s and don’ts so to speak, keep in mind that ineligible renovations costs would consist of purchasing tools, appliances, etc.
With the information given, it would be a good idea to consider doing some sort of home renovations within the next few months before the HRTC ends. Even if it is a small fix around the house, you will end up getting something back while adding to your investment. This opportunity will not be around much longer, take advantage of it while you can.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
http://www.ssgmac.ca
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Allen Taylor