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 expenditures incurred in November 2008, to convert a home heating system to an en electrical bi-energy heating system, qualify for any income tax credits?
Position: No
Reasons: Expenditures must be incurred after January 27, 2009 to qualify for the HRTC.
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence, regarding tax credits. You asked if there are any income tax credits available on the costs you incurred in November 2008 to convert your home oil heating system to an electrical bi-energy heating system. Please accept my apology for this delayed reply.
The proposed home renovation tax credit (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 new HRTC will only reduce your income tax payable; it will not be refunded as a rebate if you do not owe income tax.
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 alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures would 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 could qualify, including a home and a cottage.
The expenditures in your case were incurred in November 2008 and therefore will not qualify for the HRTC. In addition, there are no environmental income tax credits that your expenditures would qualify for in the 2008 tax year.
More information about the credit is available on the Canada Revenue Agency Web site at www.cra.gc.ca/hrtc and on the Government of Canada's Action Plan Web site at www.actionplan.gc.ca/grfx/docs/HRTC_eng.pdf.
I trust that the information I have provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
Ann Townsend
(905) 721-5218
2009-031738
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