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: Would a new dock qualify for the HRTC?
Position: Yes if the dock is attached to land within an adjoining one half acre of an eligible dwelling.
Reasons: Enduring in nature.
August 25, 2009
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, has forwarded to me a copy of your correspondence, which I received on July 6, 2009, regarding the eligibility of a new dock on residential property for 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 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.
The land on which an eligible dwelling is situated can form part of the eligible dwelling. Generally, the land that is considered to form part of the eligible dwelling cannot exceed a half-hectare (1.24 acres).
It is a question of fact whether this expenditure meets the above criteria. However, as a general rule, the materials and installation costs for a dock will be eligible for the HRTC if the dock is attached to land that forms part of the eligible dwelling.
Due to the large number of expenditures that qualify for the HRTC, it is not possible to provide a complete list of eligible and ineligible expenditures on the CRA Web site. The list is intended to provide examples to guide taxpayers in determining the types of expenditures that the CRA would consider eligible or ineligible.
You can find more information on the HRTC on the Canada Revenue Agency (CRA) Web site at www.cra.gc.ca/hrtc and in the Government of Canada brochure available 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.
Andrea Boyle
(613) 946-3252
2009-033140
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