CCI-Vancouver News

Home Renovation Tax Credit (HRTC)
Comments By Stan Dong of Berris Mangan, Chartered Accountants

The 2009 Federal Budget proposes a 15% non-refundable tax credit to individuals for eligible expenditures in excess of $1,000, but not more than $10,000, made in respect of eligible dwellings. For the taxpayer, this will result in a maximum federal tax credit of $1,350 ($10,000 - $1,000) x 15%). Note that no tax credit is received for the first $1,000.

The work must be performed or good acquired from January 28, 2009 to January 31, 2010. However, the credit will not be available for expenditures pursuant to an agreement entered prior to January 28, 2009. The credit may be claimed in the individual’s 2009 personal income tax return, even with respect to qualifying expenditures incurred in 2010.

The HRTC provides a single limit for each family. The HRTC may be claimed entirely by one member of the family or by any members of the family. Two or more families which share ownership of an eligible dwelling will each be eligible for the credit. An eligible dwelling consists of a person’s principal residence, or a principal residence of one or more of the other family members.

For condominiums and co-operative housing corporations, eligible expenditures will include the individual’s share of the cost of renovating common areas, in addition to costs to renovate the unit. This means that the owners could receive the HRTC on the special levies paid plus the cost associated with renovating their own unit if the conditions are met.

A renovation or alteration of an eligible dwelling qualifies for the HRTC provided that it is of an enduring nature and is integral to the dwelling, including expenditures for the cost of labour, professional services, building materials, fixtures, equipment rentals and permits.

The HRTC will not be reduced by other tax credits or grants under other government programs. For example, an eligible expenditure which qualifies for both the HRTC and the medical expense credits can be claimed under both programs.

Please note that the above comments are based on the information from the 2009 Federal Budget. As of February 5, 2009, the HRTC has not been legislated by the government. The final version of the HRTC might differ once it passes the legislation. It is unlikely that the government will make significant changes to the HRTC as they on focused on stimulating the economy.

Berris Mangan is a member of CCI Vancouver.