HRTC - A Family-Based Credit
On July 13, 2009 The Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food) announced the official launch of a new national advertising campaign for the popular new Home Renovation Tax Credit (HRTC) introduced in the 2009 Federal budget.
This credit is a one-time, time limited one, however, which means that if you've been planning on renovating your home and plan to use the credit on your 2009 tax return, eligible home renovation expenditures must be made between January 27, 2009 and before February 1, 2010. Families will be able to claim a 15% non-refundable tax credit for certain amounts paid to renovate their residence or cottages, up to a maximum credit of $1350, if they spend at least $1,000.
However, the credit has already caused some significant controversy.
That's because the eligibility for the credit is ìfamily basedî. For the purposes of the credit, a family will be considered to be an individual, the individual's spouse or common-law partner, and their children who were under the age of 18 throughout 2009. Yet, if two or more families have an eligible family dwelling in which they share ownership, each family can qualify for the tax credit on their tax returns. So it is possible that with three families sharing a home or cottage, up to $30,000 in renovations could be claimed, equalling a total of $4,050 tax credit, much higher than the benefits accruing to a single family!
Some people are questioning the fairness of this tax credit, while others are saying that with the economy in the dumps, who can afford to spend any money on renovations, so the fact that families sharing a home are getting a better tax break is meaningless. Other detractors of the program insist that contractors are unavailable to complete the work, and other contractors are actually invoicing for work yet to be completed.
We would like to hear from you regarding the home renovation tax credit program and the rules regarding this "family based" tax credit program.
You can contact us by clicking on the link below.
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