It’s election time and the airwaves are booming with the sound of promises by the major party candidates to secure your vote. The Conservatives want re-election, and one of weapons in their arsenal of promises is the introduction of a new Home Renovation Tax Credit. They claim that hardworking Canadian families can save up to $600 a year and that, unlike the temporary tax credit introduced back in 2009 and discontinued a year later, this new credit will be a permanent fixture, allowing homeowners to claim a significant tax credit every year in which they are doing renovation work. Great news for homeowners, right? Here’s an expanded answer to that question in 5 W’s.
WHO?
The Conservative government is seeking re-election. Three parties are vying to be your next government. Conservatives may lose the election, or at least lose their majority in government. Their earlier temporary tax credit was very popular among voters of all political loyalties and was one of the few supported by both the Liberals and the NDP. The Conservatives claim that one third of Canadian households took advantage of the earlier credit. They no doubt hope the new tax credit will replicate that success and get the benefits back to the homeowners.
WHAT?
The new Home Renovation Tax Credit would allow taxpayers to claim up to 15 percent of the cost of permanent renovations to their homes, condos or cottages. The tax credit would apply to renovation costs between $1,000 and $5,000, allowing a taxpayer to get back up to a maximum of $600 a year. Home renovations are very popular at the moment. This is a time when Canada’s renovation industry is outperforming the slower broader economy and overtaking the market for new homes. Over the past few years, spending on renovations has increased, and last year Canadians spent $68 billion on home renovations last year compared with $48 billion spent building new homes. It is hoped the credit will come as a boost at a time of slower economic growth and a falling Canadian dollar.
WHERE?
Canada-wide. Almost two-thirds of renovation spending is in Ontario and Quebec. British Columbia is third on the list with $8.5 billion spent per year.
WHEN?
Provided the Conservatives are re-elected in October AND keep their promise to voters, the Home Renovation Tax Credit would be phased in starting in 2016-2017.
WHY?
The tax credit would help first-time buyers get a foothold into an expensive housing market by way of fixer-uppers. Many sellers redo their kitchens and bathrooms to enjoy greater comfort and to boost the price of their homes.
So you may be able to take advantage of this tax credit for your next renovation project. Only time and the election results will tell!
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