Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Do the costs incurred by homeowners to install water lines from the main water line to their residences (off-shoots) will qualify for the HRTC.
Position: Generally, yes
Reasons: Eligible expenditures for the home renovation tax credit include only expenditures that relate to a renovation or an alteration of an eligible dwelling (including land) that is enduring in nature and integral to the dwelling. The cost of installing off-shoots to an eligible dwelling will qualify for the HRTC. However, costs for routine repairs and maintenance, normally performed on an annual or more frequent basis, will not qualify for the HRTC.
XXXXXXXXXX
Dear Colleague:
I am writing in response to correspondence received from your office regarding the new home renovation tax credit (HRTC). In particular, you would like to know, on behalf of XXXXXXXXXX , if the costs incurred by homeowners to install water lines from the main water line to their residences (off-shoots) will qualify for the HRTC. Please accept my apology for this delayed response.
The proposed HRTC will provide individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, for agreements entered into after January 27, 2009. Taxpayers can claim this credit for the 2009 tax year on eligible expenditures exceeding $1,000, but not more than $10,000, which will result in a non-refundable tax credit of up to $1,350.
The legislation regarding the new HRTC, which was introduced in the federal budget tabled on January 27, 2009, has not yet been made public. However, the Honourable James M. Flaherty, Minister of Finance, has publicly announced that expenditures will qualify if they relate to a renovation or an alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and if the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures will include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.
An eligible dwelling is a housing unit that is eligible at any time after January 27, 2009, and before February 1, 2010, to be an individual's principal residence. In general, a housing unit is considered to be eligible to be an individual's principal residence if it is owned by the individual and ordinarily inhabited by the individual, his or her spouse or common-law partner, or his or her children. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
Providing the above conditions are met, the cost of installing off-shoots to an eligible dwelling will qualify for the HRTC. However, costs for routine repairs and maintenance, normally performed on an annual or more frequent basis, will not qualify for the HRTC. You may wish to know that expenditures that qualify for the HRTC will not be reduced by other government tax credits or grants.
You can find more information on the HRTC on the Canada Revenue Agency Web site at www.cra.gc.ca/hrtc and in the Government of Canada brochure available at www.actionplan.gc.ca/grfx/docs/HRTC_eng.pdf. I am enclosing a copy of the brochure for your convenience.
I trust that the information provided will assist you in responding to Mr. Bertrand.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Enclosure
George A. Robertson
(905) 721-5196
2009-032658
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