HOME RENOVATION TAX CREDIT

The Canadian federal government introduced a tax credit in January 2009 for qualifying home renovations. It was available on work completed or goods acquired before February 1st 2010.    This information remains for our customers to refer to over the next few months and will be removed in July 2010.

We're cabinet experts, not tax experts, but we've outlined some of the details below from the Federal Budget announcement. However - every Canadian's tax situation is unique and it is ultimately your responsibility to understand how this tax credit affects you.

HOME RENOVATION TAX CREDIT HIGHLIGHTS

• The credit applies to home renovation expenditures over $1,000 to a cap of $10,000 per family. The credit rate is 15%. Therefore, the maximum credit is $9,000 x 15% = $1,350.

• The credit isn't affected by the person's income level. However, the person claiming the credit must have tax payable against which to apply the credit.

• Expenditures for work done after January 27, 2009 and before Feb 1, 2010 will qualify for the credit. Note that the agreement must also be entered into between those dates.

• Only work done on eligible dwellings qualifies. Generally, the dwelling must be a principal residence. Many vacation properties qualify as a principal residence but you should understand the fine print to see if these properties qualify in your situation.

• Receipts and documentation should be kept for submission if the CRA (Canada Revenue Agency) requests them.
  

• The credit is claimed on your 2009 tax return, including the amount claimed for expenses incurred in January 2010.
  
  
• A new line will be incorporated into the 2009 personal income tax return to allow you to claim the credit.

DISCLAIMER: THE INFORMATION ON THIS PAGE IS A SUMMARY BASED ON BUDGET DOCUMENTS PRODUCED BY THE GOVERNMENT OF CANADA. IT IS OUR UNDERSTANDING OF THE HOME RENOVATION TAX CREDIT, BUT IS NOT INTENDED AS TAX OR LEGAL ADVICE. PLEASE READ THE SOURCE DOCUMENTS FOR THEIR RELEVANCE TO YOUR SPECIFIC SITUATION AND REVIEW THEM WITH YOUR FINANCIAL ADVISORS. ALL INFORMATION IS SUBJECT TO ANY CHANGES THAT MAY BE MADE BY THE CANADIAN FEDERAL OR PROVINCIAL GOVERNMENTS.