HOME RENOVATION TAX CREDIT (HRTC)

In a recent Angus Reid survey, more than 80 percent of Canadian homeowners admitted they know little to nothing about the new Home Renovation Tax Credit (HRTC). Introduced in the last Federal Budget, the HRTC is meant to help homeowners receive some tax savings for doing minor or major renovations to their home.

The survey showed:

Only 18 per cent of Canadian homeowners understood that condo owners can apply their share of the cost of a renovation of the common areas in their building.
Sixty-two per cent of respondents didn't realize replacing the windows in the family cottage would be eligible.

The HRTC covers a wide range of home renovations. The work must have lasting value to the home. Painting, new flooring, laying sod and replacing doors are all covered. The work can be done yourself or completed by a contractor. You just need to keep your receipts.

Homeowners in different provinces did have varying views on whether or not they were going to take advantage of the HRTC.

Residents of Quebec were the least likely to be planning a renovation (59 per cent) even though residents have the most to gain. They can claim both the Federal HRTC as well as provincial tax credits for renovations.

Manitoba and Saskatchewan homeowners were the most likely to renovate at 61 percent. Ontario homeowners were also more likely to renovate (45 percent).

For Canadian taxpayers, their principal residence is allowed to appreciate in value tax free. So the HRTC can help Canadians increase the value of their homes while providing a tax credit now.

Canadians who do plan to claim the HRTC need to keep all receipts and invoices.All renovation expenses must be incurred after January 27th 2009 and before February 1, 2010.

You must claim a minimum of $1,000 up to a maximum of $10,000 (results in a maximum credit of $1,350 credit).

The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation