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 certain types of expenditures qualify for the home renovation tax credit (HRTC)?
Position: Expenditures for work performed or goods acquired, after January 27, 2009 and before February 1, 2010 will qualify for the HRTC if they relate to a renovation or alteration of an eligible dwelling and they are of an enduring nature and integral to the eligible dwelling. These would include expenditures to renovate a kitchen or bathroom, install new carpet or hardwood or laminate floors or a new gas fireplace into an eligible dwelling.
Reasons: 2009 federal budget
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Right Honourable Stephen Harper, Prime Minister of Canada, forwarded to me a copy of your correspondence concerning 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 following expenditures will be eligible for the HRTC:
- Renovating a kitchen, including a new counter top and flooring
- Renovating a bathroom, including new tiles or linoleum
- New carpet, and hardwood or laminate floors
- New gas fireplace
New appliances, such as a new kitchen stove, will not be eligible for the HRTC.
You can find more information on the HRTC on the Canada Revenue Agency 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.
The CRA will be responsible for administering the HRTC, whereas the Department of Finance Canada is responsible for tax policy. Any changes to tax policy would have to be proposed by the Minister of Finance and approved by Parliament. I am therefore forwarding a copy of our correspondence to Mr. Flaherty, for his consideration.
I trust that the information I have provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
c.c.: The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
House of Commons
Ottawa ON K1A 0A6
Nancy Shea-Farrow
(905) 721-5226
2009-031500
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