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In response to the sinking economy the Canadian government has implemented dozens of programs intended to pump $63 billion into the Canadian economy. By doing this they hope to stave off a long period of recession. The problem with most revenue distribution methods is that the majority of this money takes a long time to filter its way down to the homeowner. However, for a more immediate effect the government is offering a $1350 tax rebate directly to homeowners that can be used for renovations. This will include all types of projects from landscaping right up to roofing.
The Home Renovation Tax Credit (HRTC) will let homeowners deduct 15% of their home renovations up to $1350 in the form of a tax credit for their Canadian income tax returns until January 31, 2010. The wording of the budget states that, “The HRTC will provide a temporary incentive for Canadians to undertake new renovation projects or accelerate planned future projects thus providing a timely stimulus to the Canadian economy while boosting energy efficiency and the value of Canadian housing stock.” The report went on to say that this program is to take place immediately.
In real numbers the government expects that 4.6 million families will reap about $3 billion in combined tax relief. These taxpayers can claim renovation costs of over $1,000 and not more than $10,000 on their 2009 tax return. And the best part is that the process is geared to clear as much red tape as possible meaning that the money will go directly to the homeowners and not through intermediaries. The homeowner simply applies for the tax credit on their 2009 tax return but, understandably, has to have the receipts to show for the work.
Programs for energy rebates are still in effect from before and will have to include an audit from an energy expert provided by the government. This means that the home will be subjected to complete inspections beforehand and after the work has been completed to evaluate the increase in efficiency. Actually this is a continuation of a similar government program for energy efficiency put in place in 2007 that included rebates for items such as windows, heat sources and insulation. The new HRTC program widens this to include all renovation projects in both homes and vacation properties.
The real effect on the economy can be measured almost immediately because renovations, both large and small, require supplies and labour. This means that faltering lumber mills and unemployed construction workers will benefit as homeowners take projects off the shelf and put them into the renovation process. These include renovating bathrooms, kitchens or basements and installing new items such as flooring, heating systems and driveways. It also hits at the underground economy of cash payments by requiring that receipts be show to claim the rebate.
The exclusions to this program are home maintenance and new furniture, appliances, tools, carpet cleaning, landscape maintenance and snow removal. Only projects that provide a lasting benefit for the home will be considered.
For more information on how you can take advantage of The Home Renovation Tax Credit (HRTC), consult our Contractor Directory or simply Post Your Project online and have qualified contractors contact you.