Langley BC Real Estate - The Home Renovation Tax Credit (HRTC) – How does it benefit you?

Both the Canadian Government and the country’s hardware stores are really pushing the Home Renovation Tax Credit (HRTC) right now. In some ways, in this current economy, it seems like a waste of their time – after all why would home owners want to spend money on their home if they are short of cash? But, in other ways it’s a good idea – keeping on top of home maintenance issues can really pay in the long term so it could be a good investment.

Apart from maintenance issues, there are also the long term advantages of making use of the HRTC in that it could help to raise the value of your home. From small improvements to major projects, these are all covered (within the limits of the tax credit – see below), so if you’ve been thinking of fitting a new kitchen, or installing a new deck these are things which are beneficial to you as a homeowner for two reasons: one, because you can make use of them now, and two, because you can benefit from the increased value of your home when it comes time to sell.

So what exactly is the Home Renovation Tax Credit?
The HRTC is a tax credit for certain renovation work that you do on your home. Examples of what can be included in the tax credit can be seen below. Basically if you carry out work which can be included within the parameters of the HRTC, you can apply for the credit in your taxes in the tax year following the renovation.

What work is covered under the Home Renovation Tax Credit?
There are many different things that can be included within the HRTC. The government does not specify every single item that could be included as this list is almost endless, but my interpretation of what can and cannot be included is as follows:

Renovating a part of your home, such as the basement, the kitchen, or the bathroom would be included. This would cover the fixtures i.e. anything that is attached to your home as part of the reno, for example, your bathtub, your shower, your toilet, and your kitchen cupboards and counters; but it would not include appliances and items that are not fixed and can be taken away with you, such as a refrigerator, a stove, or furniture.

The HRTC would also include labour costs and professional fees, meaning you don’t have to carry out the work yourself, plus it would include equipment rentals (if applicable), and permits, if required for the work you’re doing.

The HRTC also covers work outside – a new roof for example, a new deck, or other addition to the home, laying new sod, painting the exterior of your home etc, plus many other indoor jobs such as a new carpet and other new flooring, painting, a new water heater, or a new furnace.

How much credit do you get?
The HRTC is 15% and can be applied for expenditures over $1000 but not more than $10,000 – hence the maximum credit you can claim is $1,350 as this is $9,000 x 15%. If you want to make full use of the allowance you don’t have to do all the work at once and on just one project, it can be spread anytime from January 27, 2009 up to before February 1, 2010 and can be claimed from your 2009 tax return (though obviously only covering expenditures within the applicable tax year).

If you’re still a little confused as to what you can and can’t do under the Home Renovation Tax Credit I am more than happy to try to help, otherwise please visit the Canada Revenue Agency website at: www.cra-arc.gc.ca

Warmest Regards,

Andrew Szalontai - It's all about service
Langley BC Real Estate   -   778.862.5542
andrew@YourPerfectHome.ca
Remax Treeland Realty