If you're thinking about that refurbished kitchen, or putting in an extra bathroom or a new deck, now is the time to act, because your friends in Ottawa want to help with the bills!
The recent federal budget offered a new renovation tax credit of up to $1,350 toward a wide variety of home improvements, from a new roof to a new lawn.
The one-year program, which is forecast to cost the federal government up to $3 billion, is not only designed to stimulate job-creation in the construction industry, but also to inject life into consumer spending.
It will also help keep skilled workers on the job at a time when home building starts are sagging. As the construction sector employs a lot of people, this new program can help keep those workers on site.
However, this program extends far beyond putting pay checks in the hands of construction workers. It covers a variety of projects that will help the consumer who has been waiting for a time when it was affordable to renovate their home, cottages or condos. In addition to major work such as rebuilding a kitchen or adding a bath, or finishing a basement, it also covers a lot of smaller upgrades. New flooring or rugs, a new furnace or water heater, a refinished driveway, sod for the lawn, interior and exterior painting are all covered under this new project.
The program offers a tax credit of up to 15 per cent of renovation costs over $1,000, up to a maximum of $10,000 in renovation costs. The maximum benefit is thus 15 per cent of $9,000 or $1,350. That comes right off taxes owing, but if it exceeds the total tax bill, there's no refund.
If you were waiting for the catch, it comes with the receipt that must be produced for the renovations to ensure the work was done by someone who charges tax. Aimed at eliminating ‘cash-only, no-tax' transactions.
It covers work contracted for or materials purchased between now and Feb. 1 next year. The program is only scheduled for one year, so you will have to start planning now. It doesn't cover things such as new furniture, household electronics or maintenance contracts for snow removal, pool cleaning and the like.
Householders who make energy-saving home improvements will be able to essentially double-dip because they are eligible for grants under the ecoENERGY retrofit program as well as the new tax credit.
The government estimates that about 4.6 million homes are eligible for the new program.
For more information on buying or selling real estate in Burlington or Oakville, Ontario, if you have questions about current market trends, or mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I'd be glad to answer any questions to accommodate all of your real estate needs.