In continuation to my previous article “Budget 2009: what is there for you?”, I will tell you about Home Renovation Tax Credit (HRTC). Quite notably, this year's budget serves to through some gifts to us and the most prominent among them is the HRTC. How does HRTC help us?
Home renovations are good investments for increasing the longevity, value and appeal of homes. It is a great investment for the future in terms of resale value and maintenance costs. It also serves to reduce the energy consumptions (eg. Improving the thermal insulation of the walls) and the long term cost of owning a home. This will also generate economic activity by causing demand for laborers, building materials and goods. This may also serve as an incentive to refurbish rental houses and apartments and also will attract better rent rates.
The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. The HRTC can be claimed for renovations and enduring alterations to a dwelling, or the land on which it sits.
How does the HRTC work?
The 15% credit can be claimed on portion of eligible expenditure exceeding $1,000 but not more than $10,000. Therefore the maximum benefit which can be obtained is $1,350. This credit can be claimed on expenditures incurred on one or more of an individual's dwellings. About 4.6 million families in Canada are expected to benefit from the credit. Taxpayers can claim the HRTC when filing their 2009 tax return. Routine maintenance work will not fall under the HRTC eligible expenditures.
HRTC eligible expenditures:
renovation of Kitchen, bathroom or basement
laying a new carpet or hardwood floors
building an addition, deck, fence or wall
buying a new furnace or water heater
painting the interior or exterior of a house
resurfacing a driveway
laying new sod
ineligible expenditures:
buying furniture or appliances (refrigerator, stove, couch)
purchasing tools
cleaning carpets
routine maintenance contracts (furnace cleaning, snow removal, lawn care, etc.).
Additional information is available at www.fin.gc.ca
