Information Bulletin: Federal Government HRTC
The Home Renovation Tax Credit
The recently announced budget features a very useful tax credit for homeowners, The Home Renovation Tax Credit (HRTC) . See below for the answer to some common questions on how it will apply.
THE INFORMATION CONTAINED IN THIS SUMMARY HAS BEEN OBTAINED FROM THE BUDGET DOCUMENTS PUBLISHED BY THE FEDERAL GOVERNMENT AND IS BEING PROVIDED FOR THE CONVENIENCE OF OUR CUSTOMERS. THE FOLLOWING SETS OUT OUR UNDERSTANDING OF THE HRTC AND IS NOT MEANT TO BE RELIED ON OR TAKEN AS TAX OR LEGAL ADVICE. TO ENSURE THE ACCURACY OF THIS INFORMATION AND ITS APPLICATION TO YOU, PLEASE REVIEW THE DOCUMENTATION PUBLISHED BY THE GOVERNMENT AND, IF YOU REQUIRE FURTHER INFORMATION,
PLEASE OBTAIN FROM YOUR OWN FINANCIAL ADVISORS. ADDITIONALLY, ALL INFORMATION INCLUDED IS SUBJECT TO ANY CHANGES THAT MAY BE MADE BY THE GOVERNMENT.
What types of products, services and expenses are eligible?
Eligible
•
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 interior or exterior of a house
•
Laying new sod
•
Labour costs;
•
Professional fees;
•
Building materials;
•
Fixtures;
•
Equipment rentals; and
•
Permits
Ineligible
•
Furniture and appliances (refrigerator,
stove, couch);
•
Purchase of tools;
•
Carpet cleaning; and
•
Maintenance contracts (furnace cleaning,
snow removal, lawn care, pool cleaning,
etc.)
When will the HRTC begin and end?
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.
How does the Home Renovation Tax Credit work?
Canadian homeowners can claim a 15 percent, non-refundable tax credit for eligible expenditures of more
than $1,000, but not more than $10,000 – for a maximum credit of $1,350 ($9000 x 15%). Based on
information currently available, it appears the HRTC applies to ‘do it for me’ and ‘do it yourself’ projects,
and may be claimed in addition to support from the existing ecoENERGY retrofit program and the medical
expense tax credit. Taxpayers can claim the HRTC when filing their 2009 tax return.
Examples:
Sally and Ed are a couple who have recently purchased a house. In response to the temporary
HRTC, they decide to replace their old windows and improve the insulation in their home in 2009, rather than waiting, incurring $10,000 in expenditures this year. After taking into account the $1,000 minimum threshold, a 15-per-cent credit will be available on $9,000 in eligible expenditures, providing tax relief of $1,350.
Karen and Heather are sisters who share ownership of a condominium unit. They each incur
$7,500 in expenditures renovating the kitchen in the condo. Karen and Heather each claim a
$975 credit on eligible expenditures of $6,500 ($7,500 - $1,000).
Who is eligible to participate, and what are the conditions?
Family members (spouses or common-law partners and their children under 18) are subject to a single
limit based on their pooled expenditures. The credit is only available for a dwelling that is eligible to be the
family’s principal residence or that of one or more of their other family members.
What should consumers do?
Begin to save your receipts for any home improvement project that you are currently working on that
qualify for the tax credit.
How Can I Get More Information?
Additional information on the Home Renovation Tax Credit will soon be available on Canada Revenue
Agency’s website at
www.cra-arc.gc.ca
Information is also available at Department of Finance Canada at
www.fin.gc.ca
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