As part of the government’s fiscal stimulus package, the budget proposes a temporary non-refundable tax credit for homeowners who make improvements to their property.
Details of the credit are as follows:
• individuals will be able to claim a 15% non-refundable tax credit for eligible expenditures made to their principal residence;
• the credit will apply to expenditures in excess of $1,000, to a maximum of $10,000. Accordingly, the maximum tax savings will be $1,350 ($9,000 x 15%);
• the credit will apply to only the 2009 taxation year, in respect of goods or services acquired pursuant to an agreement entered into after January 27, 2009;
• the expenditures must be incurred in the period beginning on January 28, 2009 and ending on January 31, 2010;
• eligibility will be family based, which means that only one $10,000 expenditure limit applies per family unit. A family will generally consist of an individual; his or her spouse or common-law partner, and their children under the age of18;
• ownership of a property by two or more family units – for example, ownership of a house by two siblings–would result in the ability of each sibling to claim their own credit;
• eligible expenditures must be for renovations of an enduring nature. These expenditures include the costs of professional services, labour, building materials, fixtures, equipment rentals and permits. They will not include costs related to routine maintenance, the purchase of appliances or audio-video electronics, or interest costs relating to financing the renovation;
• goods or services provided by non-arm’s length individuals will not be eligible for the credit unless the provider is registered for GST/HST purposes; and
• all eligible expenditures must be supported by receipts. Government documents indicate that examples of eligible projects include: renovating a kitchen, bathroom or basement; new carpet or hardwood floors; building an addition, deck, fence, or retaining wall; new windows and doors; a new furnace or water heater; painting the interior or exterior of a house; resurfacing a driveway; or laying new sod. This credit will not be reduced by any tax credits or grants received from other government programs, such as the ecoENERGY Retrofit program or the medical expense tax credit.
