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 landscaping costs, including associated landscape design costs, qualify for the HRTC?
Position: Generally, yes
Reasons: Eligible expenditures for the home renovation tax credit include only expenditures that relate to a renovation or an alteration of an eligible dwelling (including land) that is enduring in nature and integral to the dwelling. The cost and installation of the following landscaping items will qualify for the HRTC: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, permanent irrigation systems, large permanent garden ornaments, and retaining walls
The cost of professional landscape design services related to those eligible expenditures, would generally qualify for the HRTC. If the expenses are part of routine repairs and maintenance, normally performed on an annual or more frequent basis, the costs would not 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, which I received June 2, 2009, regarding the new home renovation tax credit (HRTC).
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, Mr. Flaherty 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.
Providing all other conditions are met, the cost and installation of the following landscaping items will qualify for the HRTC:
- new sod
- perennial shrubs and flowers
- trees
- large rocks
- permanent garden lighting
- permanent water fountain
- permanent ponds
- permanent irrigation systems
- large permanent garden ornaments
- retaining walls
The cost of professional landscape design services related to those eligible expenditures, would generally qualify for the HRTC. However, if the expenses are part of routine repairs and maintenance, normally performed on an annual or more frequent basis, the costs would not qualify for the HRTC.
You can find more information on the HRTC on the Canada Revenue Agency Web site at www.cra-arc.gc.ca/hrtc and on the Government of Canada Web page at http://www.actionplan.gc.ca/grfx/docs/HRTC_eng.pdf.
I trust that the information provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Enclosure
George A. Robertson
(905) 721-5196
2009-032531
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