Renovate your cottage –- the government will help

Email This Post Email This PostspacerPrint This Post Print This Post

spacer

Managing your Money

Renovate your cottage – the government will help
Take a renovation vacation at your cottage this year and you could enjoy a significant tax break. The Federal Government’s Home Renovation Tax Credit (HRTC) on eligible home renovations undertaken after January 27, 2009 and before February 1, 2010 may be claimed only for the 2009 taxation year and applies to eligible expenditures of more than $1,000 but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 X 15%).
The good news is that you can apply the credit to across all ‘eligible’ dwellings. The Canadian Revenue Agency (CRA) generally considers a dwelling to be eligible if it is used for personal purposes and could include a house, a condo unit, and a cottage. Additionally, the HRTC is family-based – for the purpose of the credit, a family is generally considered to consist of an individual, or an individual and his or her spouse or common-law partner, including children who will be under 18 years of age at the end of 2009. One family equals one credit but if two or more families share the ownership of an eligible dwelling, each family is eligible for their own separate credit of up to $1,350.
Here are a couple of examples of how you can use the HRTC:
You have a home in town and a cottage at the lake owned by you or your family. You can claim a total credit of up to $1,350 for eligible renovations incurred at either or both dwellings up to the maximum of $10,000 per family.
You co-own a cottage with relatives and the total cost of eligible cottage renovations is $20,000. You can claim a credit $1,350 on $10,000 of the total amount and your co-owners can also claim a credit of $1,350 on the other $10,000.
You must have acceptable documentation – such as agreements, invoices and receipts – to support your claim.  These need not be included with your tax return but must be provided if requested by the CRA.
You can’t claim for renovations aimed at earning income – such as the reno of a basement for rental purposes – only for expenditures made for personal-use area of the dwelling.
Eligible expenditures can include:
A kitchen, bathroom or basement reno
New flooring
Building an addition, deck or retaining wall
Re-shingling a roof
A new furnace or water heater
Interior or exterior painting
Driveway resurfacing or a new driveway
New sod
A permanent swimming pool
Plus associated costs such as permits, services and equipment rentals
The HRTC is for a limited time so if you were planning a home or cottage reno down the line, it could pay to reschedule it for this year. But before you start laying out large chunks of cash, talk to your professional advisor about how the extra expenditures will affect your overall financial plan.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

Take a renovation vacation at your cottage this year and you could enjoy a significant tax break. The Federal Government’s Home Renovation Tax Credit (HRTC) on eligible home renovations undertaken after January 27, 2009 and before February 1, 2010 may be claimed only for the 2009 taxation year and applies to eligible expenditures of more than $1,000 but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 X 15%).

The good news is that you can apply the credit to across all ‘eligible’ dwellings. The Canadian Revenue Agency (CRA) generally considers a dwelling to be eligible if it is used for personal purposes and could include a house, a condo unit, and a cottage. Additionally, the HRTC is family-based – for the purpose of the credit, a family is generally considered to consist of an individual, or an individual and his or her spouse or common-law partner, including children who will be under 18 years of age at the end of 2009. One family equals one credit but if two or more families share the ownership of an eligible dwelling, each family is eligible for their own separate credit of up to $1,350.

Here are a couple of examples of how you can use the HRTC:

  • You have a home in town and a cottage at the lake owned by you or your family. You can claim a total credit of up to $1,350 for eligible renovations incurred at either or both dwellings up to the maximum of $10,000 per family.
  • You co-own a cottage with relatives and the total cost of eligible cottage renovations is $20,000. You can claim a credit $1,350 on $10,000 of the total amount and your co-owners can also claim a credit of $1,350 on the other $10,000.

You must have acceptable documentation – such as agreements, invoices and receipts – to support your claim.  These need not be included with your tax return but must be provided if requested by the CRA.

You can’t claim for renovations aimed at earning income – such as the reno of a basement for rental purposes – only for expenditures made for personal-use area of the dwelling.

Eligible expenditures can include:

  • A kitchen, bathroom or basement reno
  • New flooring
  • Building an addition, deck or retaining wall
  • Re-shingling a roof
  • A new furnace or water heater
  • Interior or exterior painting
  • Driveway resurfacing or a new driveway
  • New sod
  • A permanent swimming pool
  • Plus associated costs such as permits, services and equipment rentals

The HRTC is for a limited time so if you were planning a home or cottage reno down the line, it could pay to reschedule it for this year. But before you start laying out large chunks of cash, talk to your professional advisor about how the extra expenditures will affect your overall financial plan.

—–

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

Comments on this story are moderated

About the author

MiltonSearch.com focuses on absolutely everything interesting related to the town of Milton, Ontario, including news, sports, business, arts, events, culture, transit, politics, photography, real estate, advertising, food, and a whole lot more. Part of the Townhound network, MiltonSearch.com is published by Orbit Studios. Established in June 2007, it has become one of Milton's most popular online sources for information -- a trusted and essential community resource.

2 Comments

  1. when we do our home renovation, we always look for new home styles and designs on the internet for some great ideas ,;,

    Reply

Trackbacks for this post

  1. Society of Esteem » Alternative Money System: Transfinancial Economics

Leave a Comment

Part of the Townhound Network | Design by Orbit Studios