Ellen Roseman: Tax planning - get Ottawa to help fix up your house
- May 6, 2009 7:43 AM |
- By Ellen Roseman
Money Talks is a daily business column from CBC radio.
Ellen Roseman is a business writer at the Toronto Star.
(Listen to the original audio of this column.)
Now the 2008 tax season is over, it’s time to look at how to save taxes a year from now. If you’re planning to fix up your home, why not get Ottawa to pay part of the cost?
I’m referring to the federal government’s new home renovation tax credit introduced in the last budget. It applies to eligible home renovation expenditures of more than $1,000 but not more than $10,000 - resulting in a maximum tax credit of $1,350.
You have to fix up your home by Feb. 1, 2010, to get a tax credit on next year’s return. So, start thinking about home repairs you can do right away instead of waiting.
Any home improvement that is permanent qualifies for a tax credit. This includes painting, wall-to-wall carpets, window treatments, landscaping and home security.
The expenses that don’t qualify for the tax credit include routine maintenance you do every year (such as lawn care, furnace cleaning and snow removal), furniture, appliances and financing costs.
As part of the cost, you can claim federal and provincial sales taxes, building materials, labour, professional services, permits and rentals.
Eligibility is based on a family unit. There’s one tax credit per family, which includes you and your spouse (married or common-law) and children under 18 at the end of 2009. If you share ownership of a single home with another family, you’re both eligible for a separate credit up to $1,350.
You have to hold onto the documents related to your home repairs, but you don’t have to file them with your tax return. Make sure you stay away from contractors who don’t provide a paper trail and who participate in the underground economy.
You can fix up your home or your cottage, as long as you use them both personally and don’t rent them out. But you’re limited to claiming $10,000 in total for all family homes you may own.
In a recent survey, an astonishing 89 per cent of people had heard about the tax credit. And 39 per cent of those planning to fix up their homes said their decision to renovate and the amount they planned to spend were influenced by the tax credit.
So, if your house needs work - or just a little freshening up - why not get 15 per cent of the cost back from the government? Check the Canada Revenue Agency’s website to find out what’s eligible. This is too good a deal to pass up.
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