The Canadian government has introduced the Economic Action Plan to invigorate the Canadian economy, the housing market in particular. The plan aims at restoring financial stability in the Canadian economy and boost employment. As far as home renovation is concerned, homeowners planning to renovate their homes can avail tax benefit when they file their tax return in 2009. The HRTC or Home Renovation Tax Credit is a $3 billion stimulus package that is expected to give tax relief to as many as 4.6 million homeowners when they incur expenses for home renovation.
What are the qualifying factors for HRTC?
You will be able to avail tax benefit if the home renovation is carried out during the eligibility period. The eligibility period is between January 27, 2009 and February 1, 2010. If you are planning to renovate your house, it should have the status of “eligible dwelling”. In other words, it should be your primary place of residence.
Eligible expenses
Given below are examples of expenses that are regarded as eligible as per Home Renovation Tax Credit –
- Expenses incurred on new carpet as well as hardwood floors
- Money spent on renovating your bathroom, basement and kitchen is regarded as eligible expenditure.
- Constructing a deck, wall or a new fence is also regarded as part of the renovation process.
- The amount you spend for painting the exterior as well as interior portion of the house is a part of the renovation process.
- Buying a new water heater or a furnace
- Resurfacing your driveway will be part of the renovation process.
Expenses you incur on the following are not part of the renovation process. As such, they are considered as ineligible for tax relief under the Home Renovation Tax Credit economic action plan.
- Purchase of appliances, furniture or tools
- Carper cleaning is not part of the renovation process
- Routine maintenance and cleaning activities are not included in the renovation process.
Statistical data indicate that 94% of the homeowners that are planning to get their homes renovated between April 2009 and February 1, 2010 will be taking advantage of HRTC. Approximately 39% of the homeowners have confessed that the economic action plan has motivated them to renovate their homes during the eligibility period.