| The reno tax credit: how it works | |||||||||
| UPGRADES Dos and don’ts of the Home Renovation Tax Credit | |||||||||
| PEDRO ARRAIS | |||||||||
Sun |
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| Friday, February, 27, 2009 |
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The Home Renovation Tax Credit plan is part of the federal government’s aim to inject $ 3-billion to stimulate the economy. It has met with a lot of enthusiasm — but also with a lot of questions. The plan seems simple enough at first glance: Spend up to $ 10,000 on renovations and construction on the family home, and you get a tax credit of 15 per cent back, up to a maximum of $ 1,350. It’s a credit, so it reduces the amount of federal tax you have to pay; it doesn’t mean you get a cheque for $ 1,350. The plan will be administered by the Canada Revenue Agency.The plan encourages homeowners to open their wallets with the promise of a reduction on personal income taxes paid next year. He notes that the incentive is also a boon to the Canada Revenue Agency, as homeowners will be keen to use legitimate contractors who can supply invoices for work performed. Operators of unlicensed, non-tax-paying companies or people who ask for payment under the table will likely see their business suffer. “ It will definitely affect the underground economy,” Lawson says. “ It’s not good news for those in the building trades who don’t declare income.” For more information, visit www. cra. gc. ca or call 1-800-959-8281.
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