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 the HRTC apply to every dwelling that a Canadian individual owns?
Position: No.
Reasons: If an individual owns and uses his or her home and cottage personally, eligible expenditures incurred for both properties will normally qualify for the HRTC. However, if an individual uses his or her entire property for earning business or rental income, expenditures incurred for this property will not qualify for the HRTC. Also, renovations to a housing unit located outside of Canada will not qualify for the HRTC.
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Right Honourable Stephen Harper, Prime Minister of Canada, forwarded to me a copy of your correspondence concerning the new home renovation tax credit (HRTC). In particular, you want to know whether the HRTC applies to every dwelling that a Canadian individual owns. Please accept my apology for this delayed response.
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 was introduced in the House of Commons on September 30, 2009, by the Honourable James M. Flaherty, Minister of Finance. The proposed legislation states that expenditures will qualify 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 will 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.
If you own and use your home and cottage personally, eligible expenditures incurred for both properties will normally qualify for the HRTC. However, if you own and use your entire property for earning business or rental income, expenditures incurred for this property will not qualify for the HRTC. Renovations to a housing unit located outside of Canada will 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 and in the Government of Canada brochure available at www.actionplan.gc.ca/grfx/docs/hrtc_eng.pdf.
I trust that the information I have provided is helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
Ananthy Mahendran
(905) 721-5204
2009-031183
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