Those waiting for tax act to pass may run out of time!
For those sitting on the fence or waiting till it's official, time is rapidly running out. There are just over four months remaining and I'd suggest those who wait until the last minute may find themselves competing for a limited number of contractors who can perform the work.
If demand outstrips supply, prices will probably rise and all but negate the tax benefits. Besides, who wants such work done in the winter? Best to beat the rush and at least line up some quotes from suppliers who can implement the work before November.
The home renovation tax credit is a non-refundable tax credit for work performed or goods acquired in respect of an eligible dwelling. Such dwelling is a housing unit that is eligible to be an individual's principal residence or that of one or more of their family members, at any time between Jan. 27, 2009, and Feb. 1, 2010.
In general, a housing unit is considered eligible to be an individual's principal residence where it is owned by the individual and ordinarily inhabited by the individual, the individual's spouse or common-law partner, or their children. Properties eligible for HRTC include houses, cottages and condominium units that are owned for personal use.
Eligibility for the HRTC is family-based. A family is generally considered to include you and your spouse or common-law partner, and your or your spouse's or common-law partner's children who are younger than 18 at the end of 2009. The claim can be split among family members but the total amount claimed cannot exceed the maximum allowable.
If two or more families share the ownership of an eligible dwelling, each family can claim its own credit (i.e., each up to $1,350) that is calculated on its respective eligible expenses.
The 15 per cent non-refundable tax credit can be claimed on eligible expenditures of more than $1,000 but not more than $10,000. Expenses such as:
Septic systems; Wells; Electrical wiring in the home (e.g., changing from 100 amp to 200 amp service); Home security system (monthly fees do not qualify); Solar panels and solar panel trackers; Painting interior or exterior of a house; Building an addition, garage, deck, garden/storage shed or fence; Re-shingling a roof; A new driveway or resurfacing a driveway; Exterior shutters and awnings; Permanent swimming pools (in ground and above ground); Permanent hot tub and installation costs; Pool liners; Solar heaters and heat pumps for pools (does not include solar blankets); Landscaping: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, large permanent garden ornaments;Retaining walls; Associated costs, such as installation, permits, professional services, equipment rentals and incidental expenses; Fixtures: blinds, shades, shutters, lights, ceiling fans, etc.
Examples of ineligible expenses: Furniture, appliances, and audio and visual electronics; Purchasing of tools;Carpet cleaning; House cleaning; Maintenance contracts (e.g., furnace cleaning, snow removal, lawn care and pool cleaning);and Financing costs
Note that expenses are not eligible if the goods or services are provided by a person related to you, unless that person is registered for the goods and services tax/harmonized sales tax under the Excise Tax Act.
If your family member is registered for GST/HST and if all other conditions are met, the expenses are eligible for HRTC.
HRTC is a win/win program for retailers and consumers alike. Not only does it increase business for retailers, but it also gives consumers a tax break on their home renovation projects. Remember to keep all receipts and get all contracts in writing to avoid problems with your HRTC claim.
Talk to a realtor about the home renovation tax credit program, or visit the Canada Revenue Agency website at www.cra-arc.gc.ca before you begin your project to take full advantage of the program.
