12 November 2009 Ministerial Correspondence 2009-0317481M4 - HRTC - custom window coverings

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: Are expenditures for custom window coverings eligible for the home renovation tax credit (HRTC)?

Position: Window coverings, such as blinds, shutters, and shades, that are directly attached to the window frame and whose removal would alter the nature of the dwelling are generally considered to be fixtures - items that have become part of the home, - and therefore qualify for the HRTC. Draperies and curtains may qualify for the HRTC if they would not keep their value or usefulness if installed in another dwelling. If this criterion is not met, it is likely that draperies and curtains would not qualify for the HRTC.

Reasons: Window coverings, such as blinds, shutters, and shades, that are directly attached to the window frame and whose removal would alter the nature of the dwelling are generally of an enduring nature and integral to the eligible dwelling.

XXXXXXXXXX

Dear XXXXXXXXXX :

Thank you for your correspondence written on behalf of XXXXXXXXXX concerning the new home renovation tax credit (HRTC). You asked whether expenditures for custom window coverings are eligible 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, which was introduced in the federal budget tabled on January 27, 2009, has not yet been made law. However, the draft legislation publicly released on September 14, 2009, 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.

Window coverings such as blinds, shutters, and shades, that are directly attached to the window frame and whose removal would alter the nature of the dwelling are generally considered to be fixtures-items that have become part of the home-and therefore qualify for the HRTC. Draperies and curtains may qualify for the HRTC if they would not keep their value or usefulness if installed in another dwelling. If this criterion is not met, it is likely that draperies and curtains would not qualify 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 enclosed Government of Canada brochure, which is also 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.

Enclosure

Nancy Shea-Farrow
(905) 721-5226
2009-031748