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: What is the process for individual condominium owners to claim the HRTC?
Position: Generally, supporting documentation may be in the form of a letter from the corporation and signed by an authorized individual and can include copies of agreements, invoices or receipts. The individual condominium owners can claim eligible expenditures for their unit and their share of eligible common area expenses.
Reasons: 2009 Budget statements.
XXXXXXXXXX 2009-031386
George A. Robertson, CMA
September 11, 2009
Dear XXXXXXXXXX :
We are writing in response to your facsimile transmission of March 13, 2009, regarding the new home renovation tax credit (HRTC). In particular, you would like to know the process by which individual condominium owners can claim the HRTC. We apologize for this delayed reply.
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, the Honourable James M. Flaherty, Minister of Finance, 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.
In the case of condominiums, the HRTC can be claimed for eligible expenditures incurred to renovate the unit that is eligible to be the individual's principal residence as well as the individual's share of the cost of eligible expenditures incurred for common areas. Generally, the expenditures incurred for common areas are allocated to unit owners based on the condominium corporation's governing documents.
To support a claim for renovations to individual units made by the condominium corporation's board of directors on behalf of the individual owners or to common areas of the condominium, the Canada Revenue Agency (CRA) anticipates that owners will need documentation from the corporation or the board of directors, which identifies the amounts incurred for the renovation work. For work performed on common areas, the documentation should clearly identify the individual condominium owner's portion of these expenses. Supporting documentation should include the name of the contractor and, if applicable, the goods and services tax/harmonized sales tax (GST/HST) registration number, a description of the work performed, and the dates when the work or services were performed. Generally documentation may be in the form of a letter from the corporation signed by an authorized individual and can include copies of agreements, invoices or receipts.
You can find more information on the HRTC on CRA's Web site at www.cra.gc.ca/hrtc.
We trust that these comments will be of assistance.
Yours truly,
Nerill Thomas-Wilkinson
Acting Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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