Homeowners in line for 15% Rebate on Home Renovations

In an effort to stimulate the sagging economy, the Government of Canada recently introduced a new Tax Rebate on home renovations done in 2009. Following the recent announcement of the Home Renovation Tax Credit (HRTC), tax taxpayers can claim 15% of their home improvement bills for work done between January 27, 2009 to February 1, 2010.
The tax credit, which is available for homes or cottages owners, is effective immediately. Taxpayers can claim renovations on their 2009 tax returns on costs over $1,000, but not exceeding $10,000 for a total tax break of $1,350 maximum.
Eligibility for the HRTC will be family based. A family will be allowed a single credit that may be shared within the family. If two or more families share the ownership of an eligible dwelling, each family will be eligible for their own separate credit (i.e. each up to $1,350) that will be calculated on their respective eligible expenditures.
If you own a home and a cottage, eligible expenditures incurred for both properties will normally qualify for the HRTC. However the maximum amount you can claim in respect of the HRTC is $10,000 per family.
The list of eligible expenses for the tax credit includes:
* renovating kitchens, bathrooms or basements
* new carpeting or flooring
* building additions, decks, or retaining walls
* installing furnaces or water heaters
* interior and exterior painting
* driveway resurfacing
Home furniture, appliances, tools, home cleaning and routine maintenance are excluded.
The home renovation program would appear to involve considerably less red tape than some existing initiatives that encourage investment in the home. Programs that involve rebates for investment in the energy efficiency of a house, for example, require a government auditor to approve the changes made to a home to ensure energy efficiencies have been realized.
The HRTC, however, requires homeowners to apply for the tax credit directly on their income-tax returns. The only demand is that the taxpayer save the appropriate receipts in case of a future audit by Revenue Canada.
Also on the home front, the government will put an extra $300 million over two years into energy retrofits, raise the amount first-time homebuyers can borrow from their RRSPs to $25,000, and provide up to $750 in tax relief to help with their purchases.
The federal government said the incentive will provide about $3 billion in tax relief to some 4.6 million families.
For more information about the HRTC program please visit:http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhmrnvtn-eng.html

Market Watch - May 2009

Housing Sales Increase for the Second Month in a Row!


For the second month in a row, the Canadian housing market has recorded an increasing number of sales in most areas around the country. “Conditions in the resale housing market have improved markedly this Spring,” according to TREB President Maureen O’Neill. “Home purchases have increased as households have taken advantage of low interest rates and slightly lower home prices.”While April sales remained lower than last year, the housing market gained momentum on a month-over-month basis.Paul Penner, President of the Fraser Valley real estate board, says current conditions have created one of the best buying opportunities in years. “REALTORS® have successfully communicated to their sellers to be more realistic with their prices, which is why we’ve seen a 29% increase in sales from March to April.” Penner also attributes the increase to all-time historically low interest rates and still relatively high inventory for Fraser Valley, although it is dropping rapidly.

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Ownership Housing Plays Important Role

Maureen O’Neill, President of the Toronto Real Estate Board
May 22, 2009 -- A couple of months ago, I focused this column on the affordable housing strategy that the City of Toronto was developing. This is an important issue, so I want to update you on where this strategy stands.After almost a year of consultations, a final version of the strategy was released by the City last week. Although it is not perfect, the document does make some encouraging commitments, the most important of which, I believe, are the targets that it sets for affordable ownership housing. Before I get into the details of this aspect, it is worth mentioning that the simple fact that the City’s strategy includes actions on affordable ownership housing is a considerable accomplishment. In the past, government action on affordable housing almost always focused exclusively on rental housing. For years, REALTORS® have been telling governments that ownership housing has an important role to play in affordable housing policy. This is exactly what we told the City, and I was encouraged to see some of our formal input included directly in the final version of their strategy.As we noted in our input to the City, while rental housing plays a critical role in addressing Toronto’s affordable housing challenges, ownership housing can have distinct advantages, including.
helping to ensure long-term financial security for low-income households by allowing for asset-building and the creation of equity;
creating pride of ownership, which promotes urban renewal and ultimately benefits the entire community; and,
helping to ensure rental vacancy rates remain healthy by freeing up rental units when renters make the jump to ownership.
While recognizing the role of ownership housing is critical, the actions taken to make it happen are just as important. In that regard, one of the most important commitments in the City’s strategy is the plan to extend City incentives, which are currently restricted to rental housing, to affordable home ownership initiatives. This means that the City could be offering breaks on things like property taxes, development charges, and other fees or taxes, which will help to encourage the creation of new affordable ownership housing and help people to afford the homes that they currently live in. It is expected that City will begin working on a by-law to implement this action in the fall and REALTORS® look forward to working with the City on this.Although I am encouraged by the City’s affordable housing strategy, I would be remiss if I didn’t point out some concerns over City policies that contradict the laudable objectives of this plan. I remain concerned about numerous recent City decisions that, in fact, are adding to the cost of home ownership, specifically the unfair Toronto Land Transfer Tax, property tax increases at twice the rate of inflation, and increases to costs such as garbage pick-up and water use. With this in mind, I hope that the City’s new affordable housing strategy will help to re-focus City Council’s priorities in a way that benefits home owners and buyers.Adequate housing is a fundamental need. REALTORS® understand this, which is why we will continue to work with the City, and all levels of government, to ensure that home ownership remains attainable for as many people as possible. “Greater Toronto REALTORS® look to this conference as a source of information on all of the latest tools and trends in the profession,” said Ms. O’Neill. “It is an excellent example of REALTORS’® ongoing commitment to provide quality service to their clients.”