The Home Renovation Tax Credit that passed in Budget 2009 is going to help homeowners save money and provide work for local trades people and suppliers.

This non-refundable tax credit up to $1,350 pertains to work performed or goods acquired to renovate a housing unit. It must be a principal residence used by an individual, a spouse or common-law partner, or their children. The Home Renovation Tax Credit (HRTC) is a government initiative to help soften the blow of difficult economic times – it’s all about people helping people.

Homeowners will be able to claim a credit on eligible expenditures for the period between January 27, 2009 and February 1, 2010. A family will be allowed a single credit that may be shared within the family. When two or more families share the ownership of an eligible dwelling, each family will be able to claim their own separate credit up to $1,350 each.

The HRTC will only be available for the 2009 tax year and applies to eligible expenditures between $1,000 and $10,000. The credit is 15 percent of the cost, up to the maximum of $1,350, which is 15 percent of the total that can be claimed.

The home renovation or alterations must be of an enduring nature and integral to the dwelling. The cost of the project can include labour and professional services, building materials, fixtures, rentals and permits. As you can see, this government initiative is designed to encourage people to keep improving their homes and spreading the work around locally.

Taxpayers who want to take advantage of this credit should take care to keep agreements, invoices and receipts that clearly indentify the type and quantity of goods and services required to get the job done. Friends and family members can be contracted to do the job, but only if they are already registered for the Goods and services Tax/Harmonized Sales Tax under the Excise Tax Act.

Budget 2009 ensured that the HRTC was wide-ranging in its scope so it would provide real tax relief to as many Canadians as possible. The credit could apply to renovating a kitchen, bathroom or basement, new carpet or hardwood floors, building an addition, decks, fencing, purchasing a new furnace, a new driveway, and painting. The credit will not apply to furniture, appliances, entertainment electronics, curtains or draperies, tools, cleaning carpets, or house cleaning.

Saskatchewan taxpayers who are making their homes more energy efficient under the Saskatchewan EnerGuide for Houses program can also claim the HRTC. Budget 2009 specifies that the HRTC will not be reduced by other tax credits or grants under other government programs. This is a great chance to enhance your home and help out the local economy at the same time.

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The audio version of Garry's February 9, 2009 op-ed column can be heard by clicking here