Home renovations....the Government gives back

Home renovations are smart investments in
the long term value of a home and also create
economic activity by increasing the demand for
labour, building materials and other goods. Renovations
can also reduce energy consumption and the long-term
cost of owning a home.
To provide some $3 billion of much-needed fiscal stimulus
and encourage investments in Canada’s housing stock,
Budget 2009 proposes to implement a temporary
Home Renovation Tax Credit (HRTC).
Temporary, Timely and
Targeted Stimulus
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 temporary nature of the credit will provide an immediate
incentive for Canadians to undertake new renovations
or accelerate planned projects.
The HRTC can be claimed for renovations and enduring
alterations to a dwelling, or the land on which it sits.
How the HRTC Will Work
The 15-per-cent credit may be claimed on the portion
of eligible expenditures exceeding $1,000, but not more
than $10,000, meaning that the maximum tax credit that
can be received is $1,350.
The Home Renovation
Tax Credit
The credit can be claimed on eligible expenditures incurred
on one or more of an individual’s eligible dwellings.
Properties eligible for the HRTC include houses, cottages
and condominium units that are owned for personal use.
Renovation costs for projects such as finishing a basement
or re-modelling a kitchen will be eligible for the credit,
along with associated expenses such as building permits,
professional services, equipment rentals and
incidental expenses.
Routine repairs and maintenance will not qualify for the
credit. Nor will the cost of purchasing furniture, appliances,
audio-visual electronics or construction equipment.
Who Can Claim the HRTC?
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.
Eligibility for the HRTC will be family-based. For the purpose
of the credit, a family is generally considered to consist of
an individual, and where applicable, the individual’s spouse
or common-law partner.
Family members will be able to share the credit.
BUDGET 2009
JANUARY 27, 2009
Examples of the Benefits of the
Home Renovation Tax Credit
The following examples illustrate how
homeowners can benefit from the HRTC
• 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, instead of
waiting, incurring $10,000 in expenditures. 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.
•William and Marie are a couple who are planning
to purchase a more energy-efficient furnace for their
home, and build a deck at their cottage sometime
later. To take full advantage of the temporary HRTC,
they decide to do both projects in 2009 rather than
waiting. They pay $5,000 for the furnace and
$3,500 for the deck. They also decide to have the area
around the deck landscaped for $2,500, bringing their
total costs to $11,000 ($5,000 + $3,500 + $2,500).
Marie claims a credit of $1,350 on the maximum
allowable amount of $9,000.
• 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).
CANADA’S ECONOMIC ACTION PLAN BUDGET 2009
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.gc.ca).
Information is also available at www.fin.gc.ca
Copies of this brochure are available from
the Department of Finance or Service Canada:
Department of Finance Canada
Distribution Centre
Room P-135, West Tower
300 Laurier Avenue West
Ottawa, Ontario K1A 0G5
Phone: 613-995-2855
Fax: 613-996-0518
Service Canada
1-800 O-Canada (1-800-622-6232)
1-800-926-9105 (TTY)
E-mail: services-distribution@fin.gc.ca
Ce document est également offert en français.
Examples of HRTC Eligible
and Ineligible Expenditures
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
• Resurfacing a driveway
• Laying new sod
Ineligible
• Furniture and appliances (refrigerator, stove, couch)
• Purchase of tools
• Carpet cleaning
• Maintenance contracts (furnace cleaning, snow
removal, lawn care, pool cleaning, etc.)