Home Renovation Tax Credit

What is HRTC? It's the Home Renovation Tax Credit that was proposed in the January 27th Federal Budget, that will provide for a 15% income tax credit on eligible home renovation expenditures, and is family based. Good between January 27th 2009 and February 1st 2010, it can be claimed for the 2009 taxation year on expenditures greater than $1,000, but no more than $10,000 and can provide up to $1,350 in tax relief.

Examples of eligible improvements are kitchen, bathroom and basement renovations, new deck, new hardwood floors or carpet, painting of interior or exterior of house and others. Excluded are purchase of tools and furniture, carpet cleaning and maintenance contracts, among others.

Here's an example: Sally and Ed are a couple who purchased a home. They decide to replace windows and insulate their home in 2009, incurring expenses of $10,000. After the minimum threshold of $1,000, the 15% tax credit is available on $9,000 in eligible expenditures, providing tax relief of $1,350.

This tax credit complements the support from the Government for energy-saving improvements that are already available.

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