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The-Mortgage-Gal
Minister of Finance Jim Flaherty, announced the government's first deficit budget in 11 years.  (Photo: Contributed)
Minister of Finance Jim Flaherty, announced the government's first deficit budget in 11 years. (Photo: Contributed)

Changes to federal tax budget

by - Story: 46400


On January 27, 2009, the Minister of Finance Jim Flaherty, announced the government's first deficit budget in 11 years, the result of living in a challenging environment in a global economic recession with decreasing federal tax revenues. There has been a lot written in the press about the stimulus in the budget and time will tell what effect these initiatives will have on the sluggish economy. The key tax measures which pertain to housing follow.

The Home Renovation Tax Credit (HRTC) is a 15% non-refundable tax credit for eligible home renovation costs not exceeding $10,000 incurred prior to February 1, 2010. The maximum credit of $1350 would be claimed on the 2009 tax return. Family members would be subject to a single limit, but the HRTC will not be reduced by other tax credits or grants. The taxpayer's principal residence would be eligible. In the case of a condominium or cooperative housing, the individual's share of eligible expenditures on the common areas would be included. Here are some examples of Eligible and Ineligible HRTC Expenditures:

Eligible:

  • Renovation a kitchen, bathroom or basement.
  • Putting down new carpet or hardwood floors.
  • Building an addition, deck, fence or retaining wall.
  • Installing a new furnace or water heater.
  • Painting the interior or exterior of a house.
  • Resurfacing a driveway.
  • Laying new sod.

    Ineligible:

  • Purchasing furniture and appliances (i.e. refrigerator, stove or couch).
  • Purchasing tools.
  • Cleaning carpets.
  • Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)

    The First-Time Home Buyers' Tax Credit has also been affected. First-time home buyers will be able to withdraw a maximum of $25,000 from a Registered Retirement Savings Plan (RRSP) under the Home Buyers' Plan, an increase of $5,000. This plan may also be available if you have not owned a home in the last 5 years. Also, a non-refundable tax credit based on the amount of $5,000 was introduced for those first-time home buyers who acquire a qualifying home after January 27, 2009. Individuals eligible for the Disability Tax Credit can claim this credit when a home that is purchased is more suited to their personal care needs. Also, the individual's spouse or common-law partner can claim any unused portion of the Credit.


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    About the Author

    Tracy Head and Laurie Baird help busy families find mortgage solutions. Together they have more than 45 years of experience in the mortgage industry.

    With today’s increasingly complicated mortgage rules, Tracy and Laurie spend time getting to know the people they work with and help them to better understand the mortgage process. They support their clients before, during, and after their mortgage is in place.

    Tracy and Laurie work closely with their clients, offering advice and options. With access to more than 40 different lenders, Tracy and Laurie are able to assist with residential, commercial, and reverse mortgages in order to match the needs of their clients with the right mortgage package.

    They work closely with their clients to find the right fit, and are around to provide support for years down the road!

    Contact them at 250-862-1806 or visit http://www.okanaganmortgages.com

    Visit their blog at https://www.okanaganmortgages.com/blog

     



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