Temporary Home Renovation Tax Credit
To stimulate economic growth and encourage Canadian to invest in improvements to their homes, Budget 2009 introduced a temporary Home Renovation Tax Credit (HRTC).
Amount of Credit
• Eligible individuals will be able to claim a 15% non-refundable tax credit for eligible expenditures made in respect of eligible dwellings.
• The credit will apply to eligible expenditures in excess of $1,000 but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).
Eligibility Period
• The credit will apply to expenditures made after January 27, 2009 and before February 1, 2010.
• The credit will, however, not be available in respect of expenditures for work performed or goods acquired in that period if the expenditure is made pursuant to an agreement entered into before January 28, 2009.
Eligible Individuals
• The HRTC will be family-based. For this purpose a family will be considered to consist of an individual, the individual’s spouse and children, whom throughout 2009 were under the age of 18 years.
• Family members will be subject to a single limit based on their pooled expenditures.
Eligible Dwelling
• A housing unit considered to be an individual’s principal residence where it is owned by the individual and ordinarily inhabited by the individual, spouse or their children.
• In the case of condominiums and co-operative housing corporations, the credit will be available for eligible expenditures incurred to renovate that unit that is eligible to be the individual’s principal residence as well as the cost of eligible expenditures in respect of common areas.
• In the case of a residence that is partially used to earn business or rental income, the claim will be allowed for the amount of expenditures made in respect of the personal-use areas of the residence.
Eligible Expenditures
• Expenditures would include the cost of labour, materials, fixtures, equipment rentals and permits incurred in relation to a renovation or alteration of an eligible dwelling including land that forms part of the eligible dwelling provided that the renovation or alteration is of an enduring nature and is integral to the eligible dwelling.
• Expenditures not eligible for the credit include the cost of routine repairs and maintenance, expenditures for appliances and audio-visual electronics and financing costs associated with the renovation.
• Furniture, draperies or other indirect expenditures for items that retain a value independent of the renovation, such as the cost of construction tools and equipment will not qualify for the credit.
• Any eligible expenditure claimed for the HRTC must be supported by receipts.
Any questions concerning the above should be directed to Richard Rizzo, Senior Tax Manager – rrizzo@sbpartners.ca or (905) 632-5978
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