Stephanie and Devlin Ford bought their first home last year, a nearly new property in Vaughan that needed little work.
So, why are these newlyweds spending every weekend fixing up their unfinished basement?
"The home renovation credit is too good to be passed up," says Stephanie.
The federal government will give up to $1,350 in tax credits on your 2009 tax return if you spend from $1,000 to $10,000 improving your personal residence.
Only expenditures you incur between Jan. 27, 2009 and Feb. 1, 2010 will qualify for tax relief.
In a survey of homeowners done in early April, 70 per cent said they intended to renovate before Feb. 1, 2010.
Of those planning to fix up their homes, 39 per cent said their decision to do so and the amount they planned to spend was influenced by the tax credit.
Half of the respondents will use their savings to pay for home renovations, says the survey sponsor, ResMor Trust Co.
Thirty per cent will use their line of credit, 7 per cent will use their credit cards and 5 per cent will add the cost to their existing mortgage.
The Fords aren't going into debt for their basement repairs. They're using $5,000 to $7,000 in savings to transform their 700-square-foot space.
With the help of Devlin's parents, the young couple has already done their own wood framing, electrical wiring and insulation.
Now they're ready for the drywall, a job they plan to hand over to a professional contractor.
"No matter what you're doing, except maybe putting a potted plant in your living room, qualifies to a certain extent," says Caitlin Workman, a Canada Revenue Agency spokesperson.
"So, why the heck wouldn't you do it?"
The work must be enduring and integral to the dwelling - be it a house or cottage - to be claimed.
If you live in a condo or co-operative housing project, your share of spending on common areas will also qualify for tax relief.
Renovating a kitchen, bathroom or basement.
New carpet or hardwood floors.
Building an addition, garage, deck, garden/storage shed, fence.
Re-shingling a roof.
A new furnace, wood-stove, boiler, fireplace, water softener or water heater.
A new driveway or resurfacing a driveway.
Painting of interior or exterior of a house.
Window coverings directly attached to the window frame and whose removal would alter the nature of the dwelling.
Laying new sod.
Swimming pools (permanent - in ground and above ground)
Fixtures - lights, fans, etc.
Associated costs such as permits, professional services, equipment rentals and incidental expenses.
What's not eligible:
Furniture, appliances and audio and visual electronics.
Purchasing of tools.
Maintenance contracts (e.g. furnace cleaning, snow removal, lawn care and pool cleaning).
What about home security systems? A reader who paid $2,390 to buy and install this equipment asked if she could claim it.
Yes, a home security system that is permanently installed in the home could qualify, provided all other requirements of the program are also met, Workman replied.
Do you claim the home repairs before taxes or including them?
The full amount you can claim includes the GST and PST, Workman said.
What about appliances that are permanently installed, such as a stovetop and oven?
"That's a complex question and we're looking into it," she said. "Appliances are not eligible, but kitchens are."
You don't have to submit supporting documents with your 2009 tax return, but just have them available in case you're asked.
SOURCE: THE TORONTO STAR