Home renovations are smart investments in the long-term value of a home, and with the newly introduced Home Renovation Tax Credit (HRTC) offered by the Federal government, now might be the right time to make some changes.
Your Better Business Bureau would like to provide some clarity about the HRTC and some smart tips for shoppers while they look around for contractors.
Firstly, the tax credit is based on a percentage of the total of work and not a lump sum amount. The total credit is 15 per cent, and may be claimed on the portion of eligible renovations over $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350.
The HRTC credit applies to eligible home renovation costs for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010. Therefore, consumers can only claim the HRTC tax credit when filing their 2009 tax return.
There are also specific types of work that can and cannot be applied to the HRTC. Here are some examples:
Eligible
- Kitchen, bathroom or basement renovations
- New carpet or hardwood floors
- Building an addition, deck, fence or retaining wall
- A new furnace or water heater
- Painting the interior or exterior of a house
- Resurfacing a driveway
- Laying new sod
Ineligible
- Furniture and appliances
- Purchase of tools
- Carpet cleaning
- Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)
To learn more about the Home Renovation Tax Credit go to: www.budget.gc.ca
Avoid making hasty decisions, do your due diligence. Start with bbb.org to make sure you're dealing with a reputable contractor. You can request a quote from the BBB website to do your comparison-shopping.
Also, be sure to get a written contract and receipt for the project with the company's name, date, detailed description of the project and total costs.
Spend wisely and happy home renos!