Building association wants Alberta to create a renovation tax credit. Here's what that means
Onus on the association to win over the province, says executive director
An organization representing homebuilders wants the province to introduce a renovation tax credit to help the industry recover losses from the COVID-19 pandemic.
BILD Alberta Association represents a mix of home renovators, builders and land developers. They have around 1,600 members across the province.
Scott Fash, the executive director, says a renovation tax credit would help boost the industry amid a sluggish economy.
"Effectively, it's a renovation tax credit, which is a refundable personal income tax credit for eligible renovation," Fash said.
He says the credit is a tool that's been used by a number of jurisdictions and points to Saskatchewan as an example.
"If you spend $20,000 on a reno, you could get $2,100 back in a tax rebate," he said of the neighbouring province's program.
"The reason we're discussing this and we're developing a proposal for the Government of Alberta is it's really been shown historically to be an effective tool to help local and provincial economies, and nationally kind of emerge from really tough economic times."
He added the Harper government introduced a temporary national renovation tax credit in 2009. Home renovation tax credits provided up to $1,350 in tax relief on home improvement projects of at least $1,000, but not more than $10,000.
Association has to convince provincial government
Today, while there's already high demand for this sector, Fash says there's potential for even more growth.
However, Fash says the onus will be on the association to put forward a proposal that will win over the province.
"We don't anticipate this to just be a boon for the renovation sector, we think this has tremendous benefits for the province by increasing employment," he said.
So far, the finance minister's office says it is focused on supporting the hardest hit sectors of the economy and is not currently considering a home renovation tax credit.
"Compared to many other industries, home renovations have held up fairly well during the COVID-19 pandemic," the statement read.
"Right now, Alberta's government is focused on supporting the hardest hit sectors of the economy."
Fash says he thinks the benefit of a program like this could be cost neutral for the government.
"Yes, they are going to lose money on income tax rebates. But they are going to gain the majority, if not all, of that back, through increased employment taxes, increased corporate taxes, increased employment in general," he said, adding it also deters people from renovating using the underground economy.
"A big piece that often doesn't get talked about is you are pulling money out of the underground economy that isn't taxed historically."
Helpful to consumers, Fash says
The association also hopes consumers could save money from a renovation credit, too, Fash says, including on necessary renovations like replacing roof shingles.
"There's kind of a wide variety of uses that you can kind of use it for," he said. "I guess we as an association really need to kind of put that fulsome proposal in front of [the Alberta government] and try to sell them on it."
Fash says the association considers renovation as the largest growing sector within the industry.
"There are some builders who are now moving more towards that renovation side," he said.
"It really is an emerging sector that we think has the potential to add thousands, if not tens of thousands, of more jobs in the coming months and years."
With files from the Calgary Eyeopener.