Principal Issues: Do certain expenditures qualify as eligible expenditures for the home renovation tax credit (HRTC)?
Position: It is a question of fact whether the cost of renting a storage facility to store furniture to renovate a room of an eligible dwelling will qualify for the HRTC. Costs that are directly attributable to the re-shingling of a roof of an eligible dwelling, including the dump fees required to dispose of the old shingles, will qualify for the HRTC. The costs for professional services received after January 27, 2009, and before February 1, 2010, such as drafting blueprints for a qualifying renovation of an eligible dwelling will qualify for the HRTC, even if the qualifying renovation is not completed until after January 31, 2010. The cost of a deck package that is acquired before February 1, 2010, and installed after January 31, 2010 in an eligible dwelling, will qualify for the HRTC.
Reasons: Expenditures for goods acquired and services received during the eligible period that are directly attributable to a qualifying renovation of an eligible dwelling and that are made or incurred by an individual will qualify for the HRTC.
February 3, 2010
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Calgary TSO |
Ontario Corporate Tax division 905-721-5226 Attention : Constance Trynchuk 2009-033865 |
Home Renovation Tax Credit
This is in response to your fax that was received on August 27, 2009 wherein you requested that the Income Tax Rulings Directorate respond to queries regarding the home renovation tax credit (HRTC).
Question 1:
An individual renovates a living room. The individual moves all of the furniture out of the room and stores it in a storage facility. Does the expenditure for the cost of the rental of the storage facility qualify as an eligible expenditure?
Response:
It is a question of fact whether the rental of a storage facility will qualify for the HRTC. The rental will qualify for the HRTC if it is directly attributable to a qualifying renovation of an eligible dwelling (e.g. renovating living room) and it is required. A number of factors would be taken into account and considered on a case-by-case basis. Such factors might include the availability of alternate storage in the eligible dwelling and the length of the rental compared to the length of the renovation.
Question 2:
An individual is re-shingling his/her roof and incurs dumping fees for the disposal of the old shingles. Does the expenditure for the dumping fees qualify as an eligible expenditure?
Response:
Costs that are directly attributable to the re-shingling of a roof of an eligible dwelling, including the dump fees required to dispose of the old shingles, will qualify for the HRTC.
Question 3:
An individual pays for blueprints before February 1, 2010 for a renovation in his/her house. The individual hires a contractor to do the renovation. The renovation will not be completed before February 1, 2010. Will the individual still be able to claim the cost of the blueprints?
Response:
The costs for professional services received after January 27, 2009, and before February 1, 2010, such as drafting blueprints for a qualifying renovation, will qualify for the HRTC even if the qualifying renovation is not completed until after January 31, 2010. Please note that the cost of the professional services will not qualify if the services were received under agreements entered into before January 28, 2009.
Question 4:
An individual purchases a deck package from a store before February 1, 2010 but does not build the deck himself/herself until after January 31, 2010. Is the deck package an eligible expenditure for the HRTC?
Response:
The cost of a deck package that is acquired before February 1, 2010, and installed after January 31, 2010 in an eligible dwelling, will qualify for the HRTC.
We hope that these comments will be of assistance to you.
Nerill Thomas-Wilkinson
Acting Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate