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 the costs of renovating a kitchen or a bathroom, including appliances, qualify for the HRTC?
Position: Cost of renovating a kitchen or bathroom qualify, but appliances do not.
Reasons: Renovations to a kitchen or bathroom are integral to the dwelling and are of an enduring nature. Appliances have been specifically excluded in the budget.
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Right Honourable Stephen Harper, Prime Minister of Canada, forwarded to me a copy of your correspondence asking for more information on the new home renovation tax credit (HRTC). Please accept my apology for this delayed response.
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, which was introduced in the federal budget tabled on January 27, 2009, has not yet been made public. However, the Honourable James M. Flaherty, Minister of Finance, has publicly announced that expenditures will qualify if they relate 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 that is eligible at any time after January 27, 2009, and before February 1, 2010, to be an individual's principal residence. In general, a housing unit is considered to be eligible to be an individual's principal residence if it is owned by the individual and ordinarily inhabited by the individual, his or her spouse or common-law partner, or his or her children. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
The determination of whether expenditures will meet the above mentioned criteria is a question of fact. Some examples of eligible expenditures for the HRTC:
- Renovating a kitchen, bathroom, or basement
- New carpet or hardwood floors
- Building an addition, deck, fence or retaining wall
Please note that appliances will not be eligible expenditures for the HRTC. To claim the credit, a new line will be incorporated in the 2009 personal income tax return.
Further information on the credit is available on the Canada Revenue Agency and the Department of Finance Canada Web sites at www.cra.gc.ca/hrtc and www.budget.gc.ca/2009/pamphlet-depliant/pamphlet-depliant3-eng.asp, respectively.
I trust the information provided will be of assistance.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
George A. Robertson
(905) 721-5196
2009-030998
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