7 January 2010 External T.I. 2009-0338191E5 - HRTC - Wet blasting a cement driveway

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 expenditures incurred for wet blasting the top layer off a cement driveway qualify for the HRTC?

Position: Yes, unless wet blasting is used as a routine maintenance and repairs of the driveway.

Reasons: Expenses for resurfacing the driveway of an eligible dwelling qualify for the HRTC.

XXXXXXXXXX 							2009-033819
A. Mahendran
January 7, 2010

Dear XXXXXXXXXX :

Re: Home Renovation Tax Credit (HRTC)

We are responding to your correspondence, which we received on August 13, 2009, regarding the new home renovation tax credit (HRTC). In particular, you would like to know if expenditures incurred for wet blasting the top layer off a cement driveway would qualify for the HRTC. We apologize for this delayed reply.

The legislation regarding the new HRTC has been enacted and is contained in section 118.04 of the Income Tax Act. The HRTC provides individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for services received or goods acquired, after January 27, 2009, and before February 1, 2010. However, expenditures for services received or goods acquired under agreements entered into before January 28, 2009, do not qualify for the HRTC. 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.

Under section 118.04, expenditures qualify for the HRTC 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 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.

Based on the information provided, it appears that wet blasting will be used to resurface your driveway. Expenses for resurfacing the driveway of an eligible dwelling qualify for the HRTC. However, we would like to emphasize that routine maintenance and repairs, normally performed on an annual or more frequent basis, do not 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.

We trust that the information provided is helpful.

Yours truly,

Nerill Thomas-Wilkinson
Acting Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch