Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Do building materials that you purchase and pick up for a project that you do yourself qualify for the home renovation tax credit (HRTC)?
Position: Yes, providing all other conditions are met.
Reasons: If the expenditures for the building materials are otherwise eligible expenditures and are supported by acceptable supporting documentation they will qualify for the HRTC. If you do not have a delivery slip since you are picking up the material yourself, this fact alone will not disqualify the expenditures from qualifying for the HRTC. The value of your labour is not an eligible expense.
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Right Honourable Stephen Harper, Prime Minister of Canada, forwarded to me a copy of your correspondence regarding the new home renovation tax credit (HRTC). In particular, you want to know if building materials that you purchase and pick up for a project that you do yourself will qualify for the HRTC. Please accept my apology for this delayed reply.
The proposed HRTC will provide individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, for agreements entered into after January 27, 2009. Taxpayers can claim this credit for the 2009 tax year on eligible expenditures exceeding $1,000, but not more than $10,000, which will result in a non-refundable tax credit of up to $1,350.
The legislation regarding the new HRTC was introduced in the House of Commons on September 30, 2009, by the Honourable James M. Flaherty, Minister of Finance. The proposed legislation states that expenditures will qualify if they are directly attributable to a renovation or an alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and if the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures will include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.
An eligible dwelling is a housing unit located in Canada that is owned by the individual, at the time of the renovation, and ordinarily inhabited by the individual, his or her current or former spouse or current or former common-law partner, or his or her children at any time after January 27, 2009, and before February 1, 2010. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
You can do the work yourself and the expenditures for the building materials will qualify as long as all other conditions are met and the expenditures are supported by documentation. Information about acceptable supporting documentation is available on the Canada Revenue Agency (CRA) Web site at www.cra.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/clmng-eng.html#supdoc. If you pick up the material yourself and therefore do not have a delivery slip, this fact alone would not disqualify the expenditures for the HRTC. Please note, however, that the value of your labour is not an eligible expense.
Also, expenditures will not be eligible if the goods or services are provided by a person not dealing at arm's length with the individual, such as a brother-in-law, unless that person is registered for the goods and services tax/harmonized sales tax under the Excise Tax Act.
You can find more information on the HRTC on the CRA Web site at www.cra.gc.ca/hrtc and in the Government of Canada brochure available at www.actionplan.gc.ca/grfx/docs/hrtc_eng.pdf.
I trust that the information I have provided is helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
Nancy Shea-Farrow
(905) 721-5226
2009-031165
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