Housing Stimulus
Two Government Motions to Stimulate the Housing Industry
1. First-Time Home Buyers’ Tax Credit (HBTC)
For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., closing after this date).
How is the new HBTC calculated?
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.
Who is eligible for the HBTC?
An individual will qualify for the HBTC if:
- they acquire a qualifying home; and
- neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.
If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first time home buyer. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
What is a qualifying home?
A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify.
How will I claim the HBTC?
Beginning with the 2009 personal income tax return, a new line will be incorporated to allow you to claim the credit.
Source: Canada Revenue Agency
For full information, visit http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html
2. Home Renovation Tax Credit (HRTC)
To stimulate economic growth and encourage Canadians to invest in improvements to their homes, Budget 2009 proposes to introduce a temporary Home Renovation Tax Credit (HRTC). The HRTC will provide meaningful tax relief to help Canadian homeowners make improvements to their property while promoting broad-based economic activity.
Under proposed changes, you can claim a non-refundable tax credit on your 2009 income tax return based on eligible expenditures incurred for work performed or goods acquired after January 27, 2009, and before February 1, 2010, in respect of an eligible dwelling. The Home Renovation Tax Credit (HRTC) applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 [($10,000 - $1000) x 15%].The credit will apply to expenditures in excess of $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).
Eligibility
In determining whether you are eligible to claim the Home Renovation Tax Credit (HRTC), you will need to take the following factors into account:
- Your dwelling must qualify. Generally, any dwelling that you own and is used personally by you or your family can qualify, including your home or cottage.
- Eligibility for the HRTC is family based. A family will be allowed a single credit that may be shared within the family.
- To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling.
- The expenditures must have been incurred after January 27, 2009 and before February 1, 2010, according to an agreement entered into after January 27, 2009.
Source: Canada Revenue Agency
For full information, visit http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/menu-eng.html
