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: (a) Whether the costs associated with the purchase and installation of the heavier type of hot tub (spa) which is hard wired into the homeowner's electrical panel would qualify for the home renovation tax credit (HRTC). (b) Would the purchase and installation of a pool liner qualify for the HRTC.
Position: Yes to both (a) and (b)
Reasons: To be eligible for the HRTC, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling. Hot tubs which are permanently positioned in place and hard wired into the homeowner's electrical panel would qualify for the HRTC. Portable hot tubs would not qualify as they are not enduring in nature or integral to the dwelling.
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 on June 3, 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 integral to the eligible dwelling. Such expenditures would include the cost of labour and professional services, buildings 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 costs associated with the purchase and installation of a permanent hot tub (spa) are eligible expenditures for the HRTC. A permanent hot tub is the larger, heavier type of hot tub that is permanently positioned in place and hard wired into the homeowner's electrical panel. These hot tubs are generally not considered portable. In addition, the purchase and installation of a pool liner will 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 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 provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
William King
(905) 721-5205
2009-032561
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