As the 2009 year draws closer to conclusion we find that many of our clients have now at last heard of the Home Renovation Tax Credit (HRTC). Unfortunately, like so many government programs, most people are unsure of exactly how it works or how they may benefit from it.
The word "renovation" seems to leave people with the impression that the HRTC applies only to
major home reconstruction. Often people have no idea of the range of products and services they can legitimately claim. In fact, the Home Renovation Tax Credit may have been better named the Home "Improvement" Tax Credit. We have often enjoyed being the bearers of good news to clients who did not realize that the HRTC applied to purchases such as new window blinds or design consultation fees.
(For example, advice in connection with the selection of new paint, flooring, lighting or plumbing fixtures.)
The HRTC applies to home improvement purchases between January 28 th 2009 and February 1 st 2010 and applies to expenses of no less than $1000 & no more than $10,000, resulting in a maximum tax credit of $1350. The Home Renovation Tax Credit applies to any residence that you own and is for your own personal use, including your home, condo or even cabin. As a rule of thumb, the eligible expenses must be, what is referred to as, " of an enduring nature " and " integral " to the property.
Examples of eligible expenses
Renovating a kitchen, bathroom or basement
Building a new addition, garage or deck
New windows, doors or flooring
New furnace, water heater or fireplace
New & resurfacing a driveway or re-shingling a roof
Landscaping, new trees, grass and shrubs
Fixtures, new blinds, shades, shutters, fans and lights
Associated costs such as permits, professional services, equipment rental & incidental expenses.
Unfortunately, the Home Renovation Tax Credit does not apply to purchases such as furniture or appliances, TVs & audio equipment, because these items can be removed and are therefore not an integral part of the home. The credit also does not apply to routine household maintenance, such as gutter cleaning or snow removal. The HRTC also cannot be claimed for the costs involved with project financing.
In order to claim your Home Renovation Tax Credit you are required to get all your contracts and costs for labour and services in writing. You are also required to keep your receipts, with the name of the business, vendor or contractor, including their address and the date when the goods or services were delivered.
Then when filing your 2009 personal income tax return, check for the "new line" that will allow you to claim your HRTC.
Choosing to improve your home is one of the few decisions in life where you can enjoy the benefit today and make a wise investment for tomorrow. There is still nearly three months left to take advantage of the Home Renovation Tax Credit and receive an additional benefit for making your home a better place.
If you have any questions or for more information call 1-877-959-1-CRA or visit actionplan.gc.ca for further details. |
