Principal Issues: Will the costs associated with the removal of a residential underground oil storage tank qualify for the HRTC?
Position: Maybe.
Reasons: If the removal relates to a renovation project that is of an enduring nature and is integral to the eligible dwelling, the costs of removing the storage tank will qualify for the HRTC. The removal of the storage tank on its own would not likely qualify.
Signed November 23, 2009
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, forwarded to me a copy of your correspondence addressed to your Member of Parliament, XXXXXXXXXX, regarding the new home renovation tax credit (HRTC). Please accept my apology for this delayed response.
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 was introduced in the House of Commons on September 30, 2009, by Mr. Flaherty. The proposed legislation 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.
The removal of a residential underground oil storage tank on its own would not likely qualify for the HRTC. However, if the removal relates to a renovation project that is of an enduring nature and is integral to the eligible dwelling, the cost of removing the storage tank will 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 also enclosing a copy of the brochure for your convenience.
I trust that the information I have provided is helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Enclosure
c.c.: XXXXXXXXXX
William King
(905) 721- 5194
2009-033445