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: Will renovations to a youth centre qualify for the HRTC?
Reasons: Renovations to a youth centre will not qualify for the HRTC because a youth centre is not an eligible dwelling.
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence concerning the 2009 Economic Action Plan for infrastructure improvements. Please accept my apology for this delayed response.
You would like to know if the cost for renovations to a youth centre will qualify for tax relief or government funding.
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 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.
The cost of renovating a youth centre will not qualify for the HRTC because a youth centre is not an eligible dwelling. However, the 2009 Economic Action Plan provides support for the construction of new community recreational facilities and upgrades to existing facilities across Canada. Eligible facilities include recreational facilities owned by municipalities, First Nations, counties, community organizations, and other not-for-profit entities. This federal initiative will support up to 50% of the total cost of eligible projects. The balance will be provided by provincial and municipal governments, community organizations, and the private sector. As this issue relates to federal investments in recreational infrastructure, which is the responsibility of the Honourable John Baird, Minister of Transport, Infrastructure and Communities, I am forwarding a copy of our correspondence to him, for his consideration.
I trust that the information I have provided and this referral are helpful.
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
c.c.: The Honourable John Baird, P.C., M.P.
Minister of Transport, Infrastructure and Communities
House of Commons
Ottawa ON K1A 0A6
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