It is a temporary, non-refundable tax credit. Here are a few things you should know about the HRTC as well as information about what renovations qualify and how much you can claim:
• The tax credit is 15% of eligible expenditures over $1,000 and up to $10,000 on home renovations made in respect of eligible buildings.
• The maximum tax credit amount is $1,350 per family ($9,000 x 15%).
• The tax credit will apply for costs incurred after January 27, 2009 and before February 1, 2010.
• Costs related to an agreement entered into before January 28, 2009 are not eligible for the credit.
• Costs incurred will be claimed on the 2009 tax return, including the January 2010 costs.
• The HRTC will not be reduced by any other tax credits or grants to which a taxpayer is entitled, for the same expenditures, under other government programs. For example, if an eligible expenditure also qualifies for the medical expense tax credit (METC), both the METC and the HRTC can be claimed.
• For purposes of sharing the HRTC, a family consists of an individual, and where applicable, their spouse or common-law partner, and children under 18. • Each family is subject to the maximum tax credit of $1,350, based on eligible expenditures.
• If one family member is unable to utilize the entire credit, the unused portion may be claimed by one or more of the other family members.
• If two or more families share ownership of an eligible dwelling, each of those families will be eligible for their own credit up to $1,350, based on eligible expenditures.
• An eligible dwelling is a dwelling which qualifies as the individual’s principal residence at any time during the period January 28, 2009 to January 31, 2010 inclusive, and includes the land that forms part of the dwelling.
• A housing unit qualifies as a principal residence if it is owned by the individual and ordinarily inhabited by the individual, the individual’s spouse or common-law partner, or their children. This could include a cottage or vacation home.
• For condos and co-op housing, costs will be eligible for the credit if they are incurred to renovate the individual’s principal residence “unit”, and a share of the cost in respect of common areas may also be claimed.
• Where a portion of a principal residence is rented out, the credit can be claimed only for expenditures made in respect of the personal-use areas of the home.
• Where costs are incurred for common-areas of a partly-rented home, such as a roof, the credit will apply only to the portion allocated as personal use.
• Expenditures must be supported by receipts, which will not have to be submitted with the tax return, but must be available if requested by Canada Revenue Agency (CRA).
• Expenditures will qualify if the renovation or alteration of the eligible dwelling is of an enduring nature, and is integral to, or built into, the dwelling. Examples of eligible expenditures:
• re-shingling a roof
• interior or exterior painting
• kitchen, bathroom, or basement renovations
• replacing windows or doors
• new furnace or water heater
• resurfacing a driveway
• laying new sod
• upgrading wiring
• upgrading insulation Expenditures are not eligible if they are for repairs and maintenance which are usually performed on an annual or more frequent basis. • Expenditures for appliances (e.g. fridge, stove) and audio-visual electronics are not eligible.
• Financing costs are not eligible.
Other examples of non-eligible expenditures:
• furniture and draperies
• purchase of tools or other construction equipment
• carpet cleaning
• house cleaning
• maintenance contracts for furnace cleaning, snow removal, lawn care, etc.
• an air conditioner which is a portable plug-in type (an air conditioning unit which is built in to the home heating or ventilation system would be eligible).
For more information visit www.cra-arc.gc.ca. courtesy of: News Canada