Are you considering undertaking a home improvement during this economic slump? Or are you contemplating to renovate your home during this increasingly abating real estate market? Well, if you think we are kidding, you are wrong for a comprehensive idea regarding Home Renovation Tax Credit (HRTC) may make this possible for you even in such adverse market conditions. Here is a brief discussion on all that you have ever wanted to know about Home Renovation Tax Credit to help you realize your home improvement plans.
The Home Renovation Tax Credit introduced by the Canadian government in 2009 may very well provide the much needed impetus to home owners to once again undertake their home improvement plans. In fact, the harassed home owners, who are frustrated by tax credits of extending to $1,350, will now able to catch some respite once they undertake appropriate fixer-upper development schemes tallying between $1,000 and $10,000 during the current period and till the end of the present taxation year in February 2010.
In order to make the most of the bounties provided in the 2009 Home Renovation Tax Credit you need to be familiar with the following information.
Who is eligible to enjoy the HRTC largesse?
Only the home owners qualify for the benefits offered by the 2009 Home Renovation Tax Credit.
It is important to note here that the Home Renovation Tax Credit (HRTC) can only be availed by families. In this case, the term 'family' denotes the home owner, his or her spouse, and/ or common-law partner as well as the children. For instance, this signifies that while under taking a home renovation project to the tune of $15,000, if you are not able to claim the first $10,000, your spouse or child may claim the residual $5,000. (Anyhow, it is not comprehensible as to why an 18-year-old should pay for new pot lights). According to the new federal government policy, a family household can claim a maximum HRTC of $10,000, while the utmost credit amount available for each family household is $1,350.
Nevertheless, if an individual owns a house jointly with another family, it may even be the home owner's extended family, that also occupies the home, each of the two families are able to submit their respective claims of worth anything between $1,000 and $10,000 for their individual home improvement ventures. Such a situation may arise if the home owner has purchased a house with his or her brother/ sister or brother-in-law/ sister-in-law and possess individual housing units.
What type of real estate properties meets the criteria for availing the HRTC?
Basically, only your main home and cottage qualify for the HRTC largesse. It may be noted here that no investment property are eligible for the HRTC. In addition, you are entitled to claim a maximum amount of $10,000 for improvements undertaken at your home and cottage together and not $10,000 for each of them.
Which type of home renovation come under the purview of the HRTC?
The Home Renovation Tax Credit (HRTC) includes all the expenses incurred in undertaking home improvement ventures that are essentially of a permanent character. You are entitled to spend the credit amount on interior and exterior renovations of your home as well as the plot of land on which your home is constructed.
Here are a few instances of the home improvement ventures that are approved as per the 2009 Home Renovation Tax Credit policy introduced by the Canadian government.
What are the expenditures that are dealt with by the Home Renovation Tax Credit?
The expenses for some of the home improvement development ventures that mentioned above and approved as per the 2009 HRTC comprise:
Always remember, when you are spending the amount received as per the Home Renovation Tax Credit (HRTC) it is essential to retain the acknowledgement of payment or vouchers for all expenditures made by you. At the same time, all such receipts need to be catalogued chronologically as well as along with the store or firm's registered name, address and their respective GST (goods and service tax)/ HST (harmonized sales tax) number.
All certified proofs of purchase (invoices) as well as service contracts should also be documented according to their dates, particulars of the work completed as well as the related expenditures. At the same time, it is important to mention the address of the place where the work was undertaken and include the name of the service provider's company and its GST/HST number. It is also essential to mark all such invoices as 'paid in full'. Further, you need to affix the evidence of making payments against the goods and services, for instance an annulled cheque or a credit card note.
What are the home renovations that are not acceptable as per the 2009 HRTC?
In any case, anything that does not contribute to the fundamental worth of your real estate property or repair jobs that all home owners are likely to undertake somewhat on a regular basis are not covered by the 2009 Home Renovation Tax Credit. For instance, a few of the things that are not acceptable by the HRTC are as follows:
Calculate the amounts spent and retained in your home improvement expenditure receipts, payments for professional services and then write them down in your 2009 income tax form. You will find that there is a particular space for filling up the HRTC details. It is important to note here that you should not submit your proofs of payments and vouchers along with your tax document or form. Instead, retain them lest a person from the taxation department desires to follow-up the issue with you in the long run.
Here is a word of advice. In case you feel it is essential to hire the services of a professional for your home renovation, feel free to go ahead and seek the services of an expert. Always remember that the underground or an illegal economy is thriving in the construction and home improvement business all over Canada. Nevertheless, it is advisable to hire the services of an authorized or legal professional and not someone who is involved in illegal business and willing to offer you an underhanded cut rate for the goods or services availed by you. This is very important if you really want to be eligible for the HRTC largesse.
It is pertinent to mention here that the 2009 Home Renovation Tax Credit introduced by the federal government will only accept services provided by expert contractors (including architects, electricians, plumbers, painters, gardeners and others) having registered business or those who are licensed to undertake such assignments. Always remember neither that your brother-in-law, any relative nor will a helping hand from the street be able to provide you with legitimate bill for the work they have undertaken and completed at your home. Most probably they will not possess any GST number and without it you are not entitled to the Home Renovation Tax Credit (HRTC) policy introduced by the federal government of Canada in 2009.