Federal Budget Assists New Home Buyers and Renovations!

The Federal Government released the 2009 budget this week and it contained some interesting items....I am not an accountant so I will not analyze how the whole budget will affect each person and I am not political so no comments on whether it is good or bad.

I found the below (from Google) info from a KPMG newsletter...all in all money in your pocket is better than money out.

My highlights- 15% tax credit on home renovation, $750 credit on closing costs, and an increase of RRSP contribution to purchase from $20,000 to $25,000

This along with low mortgage rates.....great time to buy and or renovate. For Mortgage info check out our CENTUM Advantage Financial Site

Tax credits for home buyers and home owners

 Home renovation tax credit

Under a new temporary renovation tax credit, home owners can claim a 15 percent non-refundable tax credit for eligible expenditures over $1,000 but not more than $10,000, for a maximum credit of $1,350 ($9,000 × 15%). The credit is available for eligible costs of work performed or goods acquired after January 27, 2009 and before February 1, 2010 (unless the expenditure is made under an agreement in place on or before January 27, 2009).

 Family members (spouses or common-law partners and their children under 18) are subject to a single limit based on their pooled expenditures. The credit is only available for a dwelling that is eligible to be the family's principal residence or that of one or more of their other family members.

 Expenditures will qualify for the credit if they are incurred in relation to a renovation or alteration of an eligible dwelling, provided the renovation is of an enduring nature and is integral to the dwelling. Examples include new furnaces, windows and decks. Eligible expenditures include labour costs, professional fees, building materials, fixtures, equipment rentals and permits.

 First-time home buyers' credit

First-time home buyers who acquire a qualifying home after January 27, 2009 may be entitled to claim a new non-refundable tax credit up to $5,000 and worth up to $750 ($5,000 × 15%).

 To qualify, neither the individual nor his or her spouse or common-law partner can have owned and lived in another home in the calendar year of the new home purchase or in any of the four preceding calendar years. The credit can be claimed by either the purchaser or by his or her spouse or common-law partner.

 The credit will also be available for certain home purchases by or for the benefit of an individual eligible for the disability tax credit.

 Home Buyers' Plan threshold increased

The budget increases the amount that first-time home buyers can withdraw tax-free from a Registered Retirement Savings Plan (RRSP) to purchase or build a new home to $25,000 (up from $20,000). The new limit applies to withdrawals made after January 27, 2009.

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