BuzzBuzzHome Corp.
January 31, 2010

Quick!!! Get to work! It is Sunday January 31, which means that there are just a few more hours to go before the home renovation tax credit (HRTC) expires.

STOP READING THIS! Get into your car and buy those supplies!!

What is this HRTC you ask? And, how does it work? The HRTC is a 15% non-refundable tax credit for “eligible” renovation expenditures made to your home (yes… “home”.. which includes a house, townhouse, vacation property… even your condo.) The credit applies to any amounts spent over $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350.

Interesting, you may say.. But, what is “eligible”? The expenses are eligible if they are incurred in relation to a renovation or alteration to your home, and are of an enduring nature and integral to the dwelling. So, to reiterate, if the item you purchase won’t become a permanent part of your home, it’s not eligible.

According to the Financial Post,

“To date, the Canada Revenue Agency has responded to nearly 300 formal technical interpretations on what qualifies for the HRTC. It has provided an extensive list on its website, which includes less-obvious renovation expenses, such as permanent reverse-osmosis systems, permanent swimming pools and hot tubs, pool liners, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountains, ponds and large garden ornaments.

Window coverings are unique. Whether the costs qualify may depend on their permanency. According to the CRA, blinds, shutters and shades that are directly attached to the window frame and whose removal “would alter the nature of the dwelling” will generally qualify for the HRTC. Even removable draperies and curtains may qualify for the HRTC “if they would not keep their value or usefulness if installed in another dwelling.””

What doesn’t apply? Great question! The CRA has also provided a list of ineligible expenses, which includes furniture, household appliances, electronic home-entertainment devices, tools, carpets, house cleaning, furnace cleaning, snow removal, lawn care and pool cleaning.

How hard is this Jan. 31 deadline? EASY! Eligible expenses for renovation supplies, such as lumber and flooring, that are purchased before midnight on Jan. 31 will qualify, even if they are installed after January 2010. CRA spokesman Philippe Brideau says the supplies must be physically delivered by the deadline to qualify for the HRTC.

But, remember, labour completed after January 31 2010 does not apply.

Are you reading this, and live in a condo?? If you own a condo, you can claim the HRTC for qualifying renovations made on your own unit, as well as for your share of renovations of the common areas made by the condo corporation. That is amazing, as I live in a condo!

As per the Financial Post,

“Perhaps the biggest challenge for condo boards and management companies is dealing with owners who have sold their condos at some point during 2009. John Oakes, chief executive of Brookfield Residential Services Ltd., said that Brookfield’s current plans are to provide a list of HRTC-eligible expenses to each property manager and corporation it manages. That list will show the name of the contractor, the invoice number, the date the invoice was paid and a brief description of the expense. This list, together with a receipt for an owner’s proportionate share, will be sent to each existing condo owner some time in late February.”

So, the big question… “How do I submit my claim?” The CRA has published Schedule 12 as part of the 2009 income tax package. On the schedule, you indicate the date on the invoice, the name and GST number of the supplier, a description of the supplies purchased or work done, and the amount paid. You don’t need to send in your receipts, but keep them in case the CRA asks to see them later!

Okay. This article is way too long, and is taking up too much of your time. GET IN YOUR CAR, AND GO PURCHASE SOME LUMBER!

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