Home Renovations:
In order to encourage consumer spending, the Federal Government is offering Homeowners various incentives...the following article was published by Canwest News Service/National Post, Janice Tibbetts:
OTTAWA -- Canadians who want to sod their lawns or renovate their bathrooms will get a tax break worth up to $1,350 as a key plank of the government's effort to inspire spending.
For a certain sector of consumers, 2009 could become the year of the reno, following the announcement Tuesday of a Home Renovation Tax Credit Tax Credit that lets taxpayers claim 15% of their fixups until Feb. 1, 2010.
"The HRTC will provide a temporary incentive for Canadians to undertake new renovation projects or accelerate planned future projects," the budget documents said, "thus providing timely stimulus to the Canadian economy while boosting energy efficiency and the value of Canada's housing stock."
The government said the incentive is expected to provide about $3-billion in tax relief to some 4.6 million families. The credit, which is available for homes and cottages effective immediately, is designed to boost construction, forestry and other industries.
Taxpayers can claim renovations on their 2009 tax returns on costs over $1,000, but not exceeding $10,000.
The home renovation program would appear to involve considerably less red tape than some existing initiatives that encourage investment in the home. Programs that involve rebates for investment in the energy efficiency of a house, for example, require a government auditor to approve the changes made to a home to ensure energy efficiencies have been realized.
The HRTC, however, simply requires homeowners to apply for the tax credit, directly on their income-tax returns. The only demand is that the taxpayer save the appropriate receipts in case of a future audit by Revenue Canada.
It also, though, means contractors will have to produce invoices for jobs such as backyard landscaping or basement refinishing -- work that Finance officials yesterday noted is often conducted on a cash basis, with no paperwork produced.
The list of eligible expenses includes renovating kitchens, bathrooms or basements; new carpeting or flooring; building additions, decks, or retaining walls; installing furnaces or water heaters; interior and exterior painting; or driveway resurfacing.
Routine maintenance does not qualify. Such things as new furniture, appliances, tools, carpet cleaning and snow removal are excluded.
Also on the home front, the government will put an extra $300-million over two years into energy retrofits, raise to $25,000 the amount first-time homebuyers can borrow from RRSPs, and provide up to $750 in tax relief to help with their purchases.
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