Renovation Tax Credit

2009/05/10 Originally published in the Vernon Morning Star.

Are you thinking of sprucing up your home to ready it for the Spring market? It's nearly always a good strategy to present your home with work already completed. In most cases buyers deduct more value than they need to, when they see a home needs work. As a result the seller potentially makes a lesser profit.

This year our current government has offered an incentive program. They will give you a tax credit of up to $1,350 for certain improvements you make to your home. This tax credit means you would pay up to that $1,350 less on your personal income tax.

To be eligible, the concerned dwelling needs to be your principle residence or your vacation cottage. Any dwelling that you own and keep for your personal use is apparently eligible.

Interesting that if two families own the same dwelling then each family is eligible for their own tax credit.

To get the maximum benefit out of this program you would need to spend up to, but not more than $10,000. It appears the first $1,000 expense is not eligible because the maximum benefit is calculated as $1,350 which is 15 percent of $9,000.

We can claim the tax credit on our 2009 tax returns only. The work must be done between Jan. 28th, 2009 and Feb. 1st, 2010 to be eligible.
Rental suites are ineligible. If you occupy part of the house you own and rent out the remainder, the eligible expense must be pertinent to the portion of the house you use, not the rental portion.

I was pleased to read that in strata complexes they are allowing renovations on the common areas to qualify. The eligible credit for each owner would be based on their proportional interest in the common area.

Only certain kinds of expenses can take advantage of this program. New flooring, sundecks, furnaces, painting etc. are eligible. Routine cleaning and maintenance, window coverings, chattels like furniture and TV's are not.

I think this is a real opportunity for taxpayers and a welcome one.
If you are interested in the program you can get further information from toll free 1-800-959-8281 or visit www.cra-arc.gc.ca/gncy/bdgt/fqhmrnvtn-eng.html or www.cra.gc.ca and follow the prompts.

Who says there's no free lunch!

Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email her or call 503-3755.

RE/MAX Vernon | 250.503.3755 | Toll free 1.888.503.3755 | 5603 - 27 ST | Vernon | BC | V1T 8Z5 | Canada

Tax Information

Renovation Tax Credit