Ok, so what’s this Federal Government Home Renovation Tax Credit all about anyway?
Let’s begin by reviewing what is NOT eligible! New appliances such as big screen TV’s, refrigerators, furniture, throw rugs, appliances, electronics, stereos and tools such as electric saws, drills et cetera are NOT eligible. Also, routine maintenance repairs such as small paint jobs, cleaning the gutters, power washings are not covered.
Well what is eligible?
Essentially, repairs of a major or permanent nature would be eligible. These would include major structural renovations, new carpeting, major interior or exterior painting, new deck, new floors, new windows, new doors, major landscaping, new furnace, new roof, new plumbing or bathroom fixtures, et cetera would be eligible items. Also, the expenditures have to be for your personal property. So your home, cottage or Canadian vacation property would qualify. Renovations for a rental or investment condominium or renovations to a basement apartment that you are renting out are not eligible for the credit. Renovations have to be done between January 27, 2009 and January 31, 2010. Remember that there is just one allowable claim per family.
How much is the credit worth?
The credit is 15% of renovation expenses between $1,000 and $10,000. If you spend $1,000 then you get zero. Between $1,000 to $10,000 you get 15% or $1,350. So if your total cost was $15,000 you would get the maximum credit of $1,350. If your total cost was $7,000 you would get a credit of $900.
How exactly do I get the credit? Does the Canadian government send me a cheque?
You will claim the credit when you file your 2009 income tax in the spring of 2010. Let’s say you spent $7,000 and therefore your credit is $900. On your 2009 tax return the income tax that you would otherwise owe will reduce by $900. So essentially, if you are due a refund then your refund will increase by $900. If you owe taxes then your tax bill will reduce by $900. If you have a modest income for 2009 (under $10,000) you would not enjoy the credit because you would not owe any tax anyway. You do not have to send receipts in with your tax return but you must be able to provide them should Canada Revenue request them as part of their routine review request.
How can I get more information?
Canada Revenue has an explanatory website feature at this address below.