The federal government has announced an expansion to the ecoEnergy Retrofit plan,
offering a 15 percent tax credit up to $1350.00 towards a specific variety of home
renovations if made after January 27th, 2009 and before February 1, 2010.
Your House Smart Home Improvements consultant can fill you in on everything you need
to know about the new ecoEnergy Retrofit Tax Credit on elligable home improvements,
during your free in-home consultation.
(Call House Smart Home Improvements today for your free estimate at 604-585-2020)
Why did the Government propose this New Tax Credit?
This Home Renovation Tax Credit, or HRTC, is intended to be a temporary incentive for
Canadians to undertake new home renovation projects, providing a much needed stimulus
to the Canadian economy while boosting energy efficiency and the value of Canada's housing
stock. A robust housing sector is an important part of a flourishing economy in Canada, as it
provides the need for labour, building materials, and other goods. Home renovations are not
only a wise investment in the
long-term value of a home, but can generate a boost in the economy in many areas.
The Home Renovation Tax Credit has also been established to support energy efficiency,
and to boost participation overall in the ecoEnergy Retrofit program.
Here Are the Details of the HRTC Tax Credit
The HRTC will provide a temporary 15 percent income tax credit on 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 credit
may be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding
$1,000, but not more than $10,000, and will provide up to $1,350 in tax relief.
Who Can Claim the HRTC
The HRTC will be family-based. For the purpose of the credit, a family will generally be
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.
The amount eligible for the credit will be based on the total value of eligible expenditures
incurred across all eligible dwellings. A dwelling will generally be considered eligible if it is
used for personal purposes. This will include a house, a cottage, and a condominium unit.
It is estimated that about 4.6 million families in Canada will benefit from the HRTC.
Benefits of the Temporary Home Renovation Tax Credit—Examples
The following examples illustrate how homeowners can benefit from the HRTC.
1. Sally and Ed are a couple who have recently purchased a house. To take advantage of
the temporary HRTC, they decide to replace their windows and improve the insulation in
their home in 2009, instead of waiting, incurring $10,000 in expenditures. After taking
account of 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.
2. 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. This credit is in addition to the ecoENERGY
Retrofit grant that William and Marie expect to receive for installing a more energy-efficient
furnace.
3. Karen and Heather are sisters who share ownership of a condominium unit. They each incur
$7,500 in expenditures renovating the kitchen in the condominium, in part to provide access for Heather’s wheelchair. Karen and Heather each claim a $975 credit on eligible expenditures of
$6,500 ($7,500 – $1,000).
This credit is in addition to the Medical Expense Tax Credit that Heather may claim on the
portion of expenses eligible for that credit.
Expenditures Eligible for the HRTC
It is proposed that the HRTC be claimed for renovations and alterations to a dwelling or the
land on which it sits that are enduring in nature. For example, homeowners will be able to claim expenditures for major renovation projects such as finishing a basement, renovating a kitchen,
or building an addition. Costs associated with such projects will be eligible for the credit,
including permits, professional services, equipment rentals and incidental expenses.
Routine repairs and maintenance normally performed on an annual or more frequent basis
(e.g. cleaning, lawn fertilization, and snow removal) will not qualify for the credit.
The cost of purchasing furniture, appliances, audio-visual electronics and construction
equipment will not be eligible.
Individuals will need to keep receipts for expenditures, and may claim the HRTC when
filing their income tax returns for 2009.
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:
· Purchase of furniture and appliances (e.g. refrigerator, stove, and couch)
· Purchase of tools
· Carpet cleaning
· Maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, and pool cleaning)
The HRTC will complement support provided by the Government for Canadians to undertake
energy-saving improvements to their homes. Federal grants paid through the ecoENERGY
Retrofit program will not reduce the value of claims made for these expenditures under the
HRTC.
Eligible renovation expenditures claimed under the Medical Expense Tax Credit may also be
claimed under the HRTC.
The effectiveness of the HRTC will be enhanced to the extent that retailers also encourage homeowners to undertake renovations to their properties.
It is estimated that this measure will cost $500 million in 2008-09 and $2.5 billion in 2009-10.
Your House Smart Home Improvements consultant can fill you in on everything you need
to know about the new ecoEnergy Retrofit Tax Credit on elligable home improvements during
your free in-home consultation.
Call House Smart Home Improvements today at 604-585-2020.
