Principal Issues: Will renovations to a library owned by a non-profit organization qualify for the HRTC?
Position: No.
Reasons: The HRTC is available only to individuals and a library is not an eligible dwelling for the HRTC.
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Dear Colleague:
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of correspondence from your office, which I received on June 26, 2009, concerning the new home renovation tax credit (HRTC). In particular, you want to know if renovations to a library owned by a non-profit organization will qualify for the HRTC.
The proposed HRTC will provide individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, for agreements entered into after January 27, 2009. Taxpayers can claim this credit for the 2009 tax year on eligible expenditures exceeding $1,000, but not more than $10,000, which will result in a non-refundable tax credit of up to $1,350.
The legislation regarding the new HRTC, which was introduced in the federal budget tabled on January 27, 2009, has not yet been made public. However, Mr. Flaherty has publicly announced that expenditures will qualify if they relate to a renovation or an alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and if the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures will include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.
An eligible dwelling is a housing unit that is eligible at any time after January 27, 2009, and before February 1, 2010, to be an individual's principal residence. In general, a housing unit is considered to be eligible to be an individual's principal residence if it is owned by the individual and ordinarily inhabited by the individual, his or her spouse or common-law partner, or his or her children. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
Renovations made by a non-profit organization to a library will not qualify for the HRTC because the HRTC is available only to individuals and because a library is not an eligible dwelling.
You can find more information on the HRTC on the Canada Revenue Agency Web site at www.cra.gc.ca/hrtc and in the Government of Canada brochure available at www.actionplan.gc.ca/grfx/docs/HRTC_eng.pdf. I am enclosing a copy of the brochure for your convenience.
I trust that the information provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Enclosure
Ananthy Mahendran
(905) 721-5204
2009-032940