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Thursday, April 9, 2009

Inventive Incentive?

In the last federal budget the Canadian government introduced several new incentives to help stimulate the economy. Of particular interest to those of us in the kitchen and bath industry is the Home Renovation Tax Credit.

Whether or not you believe incentives are the way out of the economic doldrums, the HRTC presents home owners with a terrific opportunity to save a bit on their 2009 tax return. If you also consider also that interest rates are as low as they’ve been in a long time, and that trades people are nowhere near as busy as they were even a year ago … well, now is a really great time to do that kitchen reno.

Nobody ever accused me of being subtle!

So here’s how the HRTC works:
  • The credit is 15% based on eligible expenditures made for renovations to eligible dwellings (a dwelling is considered eligible if it is an individual’s principal residence).

  • You apply the 15% to expenditures in excess of $1,000, but not more than $10,000. The maximum credit end up being $1,350 ($9,000 x 15%).

  • The credit applies to renos completed between January 27, 2009 and before February 1, 2010. However, if the agreement to do the work was made before January 28, 2009, then you’re out of luck.

  • Eligibility for the HRTC will be family-based, with only one credit allowed per family based on pooled expenses. If more than one family owns the dwelling together, then each can claim a credit.

  • Expenses that qualify are those that are made to renovate the dwelling, provided that the renovation is of “an enduring nature” and is integral to the dwelling as well as land that forms part of the dwelling.

    Examples of qualifying expenses: the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.

    Examples of non-qualifying expenses: routine repairs and maintenance, appliances, home electronics, financing costs associated with the reno.
Just in case you’re having trouble figuring out what to use the $1,350 for, here are a few suggestions:
  • A nice, quiet dishwasher.
  • Glass tiles for an average back splash.
  • A stainless steel under-mount sink.
  • A granite countertop for your island.
  • A weekend away at a resort while your kitchen is being gutted.
Keep in mind this is a summary of the HRTC. Be sure to visit the Government of Canada website for full details.

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