Principal Issues: Does the installation of a salt water chlorination system for an in-ground pool qualify for the HRTC?
Position: Yes. To qualify, the chlorination system must be permanently connected to the pool infrastructure and permanently wired to electrical circuits.
Reasons: The alteration to the pool infrastructure is permanent in nature
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Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence, which I received on July 28, 2009, asking whether the purchase and installation of a salt water chlorination system for an existing in-ground pool qualifies 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 law. However, the draft legislation publicly released on September 14, 2009, states 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 located in Canada that is owned by the individual, at the time of the renovation, and ordinarily inhabited by the individual, his or her current or former spouse or current or former common-law partner, or his or her children at any time after January 27, 2009, and before February 1, 2010. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
You state that the chlorination system for your in-ground pool is permanently connected to the pool's infrastructure and permanently wired to electrical circuits. Provided the above conditions are met, the installation of the chlorination system will generally qualify for the HRTC.
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 reference.
I trust that the information provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Enclosure
Robert Dubis
(905) 721-5191
2009-033447