Home Renovation Tax Credit

The budget proposes to introduce a temporary home renovation tax credit. Individuals will be able to claim a 15% non-refundable tax credit for eligible expenditures made in respect of a dwelling that is eligible to be their principal residence. The credit will apply to expenditures in excess of $1,000 to a maximum of $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%). This credit will only be available in respect of expenditures for work performed or goods acquired after January 27, 2009 and before February 1, 2010. Expenditures for work performed or goods acquired in that period made pursuant to an agreement entered into before January 28, 2009 will not qualify for the credit. Routine repairs and maintenance, appliances, audio-visual electronics and financing costs associated with a renovation will not qualify for the credit. Family members will be subject to a single limit based on their pooled expenditures.

Home Buyers' Plan

The Home Buyers' Plan (HBP) allows first-time home buyers to withdraw amounts from their RRSP to purchase or build a home without having to pay tax on the withdrawal. The limit for HBP withdrawals made after January 27, 2009 will increase from $20,000 to $25,000. The withdrawn amounts will continue to be repayable in installments over a period not exceeding 15 years.

First-Time Home Buyers' Credit

The budget proposes to introduce a new non-refundable tax credit of $750 (based on a credit amount of $5,000) for first-time home buyers who close a home purchase after January 27, 2009. The maximum credit that may be claimed for a jointly purchased home is limited to the amount of the credit that one individual could claim.