Federal Tax Break for Home Renovation?
January 22nd, 2009 | Published in finances, renovating | 17 Comments
The Globe and Mail has been reporting on the new budget for Jan. 27th this week and as such, the proposed tax credit for home renovations. Should the break go through, it could spur the construction industry, keeping layoffs at bay, and would more likely keep spent Canadian dollars in the country.
Whether or not all types of renovations or if only retrofits and upgrades for energy efficiency would be eligible was not elaborated on.
Meanwhile, the CBC has reported that in Quebec, the Liberal party will include a home renovation tax credit, in their budget. Homeowners, who live in a single-family residence must hire a certified contractor. Projects would be a minimum of $7,500 for 20% coverage of the job, to a maximum of $2,500, and it would be retroactive to Jan. 1st of this year.
Good news to homeowners and contractors who’ve seen their sales slump the last few months?
January 28th, 2009 at 11:15 am (#)
Now to actually find a contractor. In October 2003, I paid for an EnerGuide for Houses Evaluation – work not yet done.
I’ve had 4 qoutes to insulate the basement, no one has shown up to do the work even though I gave the go ahead.
In September 2007, I paid for an ecoEnergy Energy Efficiency Evaluation report. In October 2007, I ordered 3 new windows and 2 new doors and scheduled siding, insulation and close off 1 door. They arrived April 2008, they’re not installed yet. I got a qoute for new soffits, approved it, still waiting. I asked for a qoute for new outside insulation & siding, still waiting. I got a qoute for a new furnace, when I didn’t order it , they said whoops, we made a mistake in pricing and it went down $1,000.
I’m also waiting for a front deck & ramp for easier access,kitchen renos were backed up 3 years from the date I ordered them – I haven’t had an update on the time line for completion yet.
January 28th, 2009 at 2:08 pm (#)
I was planning on doing a basement renovation in the next month, and its nice to know I will be most likey getting a tax break on this renovation. I have actually done work with a few contractors on this site in the past and I find it really easy to navigate through!!! Hopefully this tax credit will increase the employment rate and boost the economy!!! Looking forward to the Results……
January 28th, 2009 at 2:11 pm (#)
From the Toronto Star today: (http://www.thestar.com/News/Canada/article/578129)
“A new, one-year, non-refundable Home Renovation Tax Credit is proposed to kickstart the construction and forestry industries, and in turn, and increase long-term home values.
Families can pool the amount – over $1,000 and up to a total of $10,000 of eligible expenses – spent on renovating their home or cottage, and claim a 15-per-cent credit, worth up to $1,350 on their 2009 tax payable bill. Receipts would be required to show renovations to, for example, a kitchen, bathroom or basement, a new deck, fence or retaining wall, or for the purchase of a new furnace or water heater.”
January 28th, 2009 at 2:31 pm (#)
This is great news, although I wish it started last year, when I did over $40k in renovations! There is still maintenance to do however and I might as well do it this year and get the credit, then to hold off and loose it next year. It really doesn’t take much to work up to $10k! Love the site and all the great photos. Your feature projects are always great inspiration!
January 29th, 2009 at 11:12 am (#)
Does anyone know how to apply for this credit? Does it come off the contractor’s bill (simplest method) or do you have to apply for it either separately or on your 2009 tax return?
January 29th, 2009 at 12:40 pm (#)
From the Department of Finance website:
(http://www.budget.gc.ca/2009/pamphlet-depliant/pamphlet-depliant3-eng.asp)
“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 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.”
February 1st, 2009 at 4:48 am (#)
Does this all mean that if the job is under $7500 that it does not qualify for a tax break?
February 3rd, 2009 at 12:06 pm (#)
I believe that the minimum is $1,000 and up to $10,000.
February 11th, 2009 at 5:30 pm (#)
If I have overpaid in taxes deducted from my pay cheques and am eligible for a tax refund, will I still be eligible for the home renovation tax credit (which will increase the amount of the refund)?
February 13th, 2009 at 8:41 am (#)
Feb 13/09: We have already begun our upgrades due to a toilet leak yesterday in a hundred year old home. We had drawn up plans to bring a very old kitchen up-todate. We are encouraged through this tax break to proceed. Kitchens and bathrooms are the most expensive part of any home. Hopefully, we can continue by trying to keep the costs to a minumum by doing a lot of the work ourselves but there are some jobs that only plumbers and electricians can do….and they don’t come cheap…nor should they. It will be great, if at the end of this, we get a tax break to help with the costs. For 2 retired people it’s a daunting task at best.
Marzie
March 1st, 2009 at 6:24 pm (#)
I live in a strata and we have to do our membrane on our garage it should cost between 5000-7000$ each unit since I own and live in my unit can I claim it for the HRTC.Thanks
March 2nd, 2009 at 7:00 pm (#)
As a contractor myself. Can a do a renovation and use the material costs against the tax break?
April 14th, 2009 at 10:08 am (#)
If I hire a contractor to fix a leak in my basement, is this covered under the tax rebate.
September 13th, 2009 at 5:14 am (#)
My mother in law owns her own home. She is a senior with a disability. Her current tax situation is such that she pays zero taxes per now. She receives the Ontario tax credits back on a yearly basis. Otherwise, she was adequate deuctions and credits to offset her yearly income. Since the home reno is a 15% tax credit, does that mean this new credit will not be any benefit to her ( ie. if you are not paying taxes now, the credit will have no effect on her tax?
Bud
January 17th, 2010 at 1:13 am (#)
Thank you, great read!
February 26th, 2010 at 12:21 pm (#)
Is the home renovation tax credit for U.S citizens or is it only for Canadian citizens?
January 26th, 2011 at 7:02 pm (#)
Hello everyone, i have put together some helpful tips and idea for you to plan out your next renovation with a better understanding.
http://homerenovations2.blogspot.com/