The Government of Canada has been actively investing in the Economic Action Plan to give people incentive to purchase homes. The Economic Action Plan includes the Home Renovation Tax Credit, the First-Time Home Buyers’ Tax Credit, and the expansion of the Home Buyers’ Plan.
Home Renovation Tax Credit
Renovating your home comes with great benefits. Obvious advantages include an increased value to your home and a more luxurious residence. And now, the Home Renovation Tax Credit temporarily provides an income tax credit towards renovations or goods purchased for the purpose of renovations for one year, between January 27,2009 and February 1, 2010. It could be claimed on eligible expenses ranging from $1,000 to $10,000 amounting to a total potential credit of $1,350.
The following is a list of applicable expenses: kitchen, bathroom, or basement renovations; installing new carpet or hardwood floors; installing a new furnace, water heater, or central air conditioning unit; painting the exterior or interior of your home; building an addition, deck, fence, or retaining wall; and, resurfacing a driveway.
Additional funds for “green” renovations such as windows or insulation are available as well, provided a prerequisite home energy audit has been done to identify the inefficiencies.
Expenses that are not eligible towards a Home Renovation Tax Credit include: furniture, appliance, and tool purchases; carpet cleaning, and maintenance contracts.
First-Time Home Buyers’ Tax Credit
There are many expenses associated with purchasing your first home including, but not limited to, legal fees, land transfer taxes, and disbursements all in addition to the saved money for a down payment. To assist in relieving some of these expenses, the Government of Canada established the First-Time Home Buyers’ Tax Credit. It is a $5,000 non-refundable income tax credit on a home purchased after January 27, 2009. The credit provides up to $750 in federal tax relief. (Certain conditions apply.)
Expansion of the Home Buyers’ Plan
As of January 27, 2009, the Government of Canada has increased the withdrawal limit for Registered Retirement Savings Plans (RRSP), allowing first-time homebuyers to withdraw $25,000 per person; a $5,000 increase.
Take advantage of the above benefits of purchasing a home. For more detailed information, contact your Coldwell Banker Terrequity sales representative.
Written By: Sevinj Najafova, you may contact Sevinj via e-mail at snajafova@terrequity.com.
