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Home Renovation Tax Credit Not Law Yet - Not valid until its made law: MP
February 25th, 2009 2:20 PM

OTTAWA -- A minority Parliament might thwart homeowners dreaming of ways to take advantage of the federal government's promised renovation tax credit

The tax credit, which offers a rebate of up to $1,350, was one of the highlights of the Tory government's $40-billion fiscal stimulus package in the budget last month and has been heavily promoted since then.

However, the legislation necessary to make the program a reality isn't expected until the fall and that has at least one Manitoba homeowner wary of the government's promise.

"The program to me does not start until the bill is passed," East St. Paul resident Ken Miller said.

Miller said he called the federal government and was told all the details are soft until the legislation is passed.

"I think the public should be aware to hold off until the bill passes," Miller said. "What if there are changes?"

Chisholm Pothier, spokesman for Finance Minister Jim Flaherty, said nobody should worry that they won't get credit for renovations done before the legislation passes.

He said the legislative changes needed for the tax credit are complex and were not included in the first budget implementation bill that is currently making its way through Parliament.

It will be in the next one -- but that bill isn't expected to come until the fall.

However, the Tories will face at least three more confidence motions tied to the budget before the fall -- any of which could lead to the government's defeat.

Winnipeg NDP MP Pat Martin said there are several opportunities for the government to fall before that bill is even introduced, let alone passed.

He said because of that he is warning his constituents not to count on the program.

"We're being asked to take a huge leap of faith, that the money you spend today will be tax deductible next spring," Martin said.

If the government falls before the tax credit is enacted in legislation, homeowners who had been doing renovations expecting the credit would be out of luck.

Martin raised the issue in a House of Commons committee earlier this month and a finance official said the budget bill was put together quickly and the home renovation tax credit was too complex to be included.

The official also acknowledged that until the legislation is passed, the tax credit is not real.

However, Pothier insisted the details of the credit that were advertised on budget day will stand once the legislation is introduced.

Homeowners who've done renovations, or will do them before the legislation is passed, will be able to claim the credit next year, he said.

In the main budget tabled by Finance Minister Jim Flaherty on Jan. 27, the temporary home renovation tax credit is described as a 15 per cent income tax credit on eligible home renovations done between Jan. 28, 2009 and Feb. 1, 2010. The credit can be claimed on any work performed or supplies purchased over $1,000 to a maximum of $10,000.

Eligible renovations include kitchen and bathroom upgrades, basement renovations and the installation of new furnaces, water heaters and flooring. Interior and exterior painting, paving a driveway or laying down sod are also eligible.

Regular household maintenance -- such as snow shovelling or lawn care -- is not eligible.

Homeowners are advised to keep receipts and claim the credit on their 2009 taxes, which will be filed in 2010.

Pothier said it's not unusual for tax measures announced in a budget to not be included in implementation legislation right away, but said the Canada Revenue Agency can still administer those changes as long as they were included in the budget papers tabled on budget day.

In the 2007 budget, unveiled that year in March, the Conservatives promised a $2,000 rebate to consumers who bought fuel-efficient cars. But the details of the program took months to develop and it wasn't until late fall of that year that any applications were available.

The program did eventually live up to the guidelines laid out in the budget, including the eligibility requirements for when a car had to be purchased to qualify for the rebate.


Posted by Denise Young on February 25th, 2009 2:20 PMPost a Comment (0)

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Budget 2009!
February 5th, 2009 3:14 PM
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.




Posted by Denise Young on February 5th, 2009 3:14 PMPost a Comment (0)

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