Principal Issues: Does insulating the exterior of a house and replacing the siding on a house with new siding qualify for the new HRTC.
Position: Yes
Reasons: Budget documents
XXXXXXXXXX 2009-033790 George A. Robertson, CMA September 8, 2009
Dear XXXXXXXXXX :
We are responding to your correspondence, which we received on August 13, 2009, asking if insulating the exterior of your house and replacing the siding with new siding qualify for the new home renovation tax credit (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, the Honourable James M. Flaherty, Minister of Finance, 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.
Providing all other conditions are met, the insulating of the exterior of your house and replacing the siding of your house with new siding will qualify for the HRTC. You may wish to know that expenditures that qualify for the HRTC will not be reduced by other government tax credits or grants, such as the eco-ENERGY Retrofit.
You can find more information on the HRTC on the Canada Revenue Agency Web site at www.cra.gc.ca/hrtc.
We trust that the information provided is helpful.
Nerill Thomas-Wilkinson
Acting Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch