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: Is the HRTC available to a non-resident for renovations or alterations undertaken at a Canadian property.
Position: No. in general, the ITA does not allow a non-resident to claim a non-refundable tax credit unless all or substantially all of the individual's income for the year is earned in Canada.
Reasons: The ITA generally prevents non-residents from claiming non- refundable tax credits.
XXXXXXXXXX
Dear XXXXXXXXXX :
The Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence, which I received June 8, 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.
Your letter states that you are a non-resident. The Income Tax Act generally does not allow a non-resident to claim non-refundable tax credits unless all or substantially all of the individual's income for the year is included in computing the individual's taxable income earned in Canada for the year.
You can find more information on the HRTC on the Canada Revenue Agency 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
Robert Dubis
(905) 721-5191
2009-032666
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