You've just bought a recreation property and the house could use some serious updating, or perhaps the family cabin is starting to show its age.
It might be time for some renovations, and the timing couldn't be better, thanks to the federal government's Home Renovation Tax Credit (HRTC).
Although it has received a lot of publicity, many people don't realize that the credit can also apply to improvements you make to a vacation home, cabin or cottage.
Joanne Gorsalitz, communications manager with the Calgary Tax Services Office, says as long as your recreational property is reserved for personal use and not rented out, it is eligible under the program.
Gorsalitz says the 15 per cent non-refundable tax credit is available on expenditures of more than $1,000 and up to a maximum of $10,000.
The maximum is per family, not per property, so the $10,000 can be shared between your primary residence and vacation property if you choose. The maximum available tax credit would be $1,350, which is 15 per cent of $9,000, since the first $1,000 is not eligible.
To qualify for the credit, the improvements you make to your recreation property must have an enduring nature to them, says Gorsalitz.
Some examples of eligible improvements, which can be found on Canada Revenue Agency's website (cra-arc.gc.ca), include renovating a kitchen, bathroom or basement, new carpet or hardwood floors, septic systems, wells, adding deck or permanent hot tub or installing solar panels.
Examples of ineligible expenses include things such as purchasing new furniture or appliances, cleaning carpets, lawn care, or buying new curtains and drapes.
The expenses related to a project can include materials, permits, labour and professional services, fixtures and rentals. However, your own labour cannot be calculated as an expense.
Gorsalitz says the program covers projects that began, or were entered into contract for, after Jan. 24, and that are completed and paid for before Feb. 1, 2010.
People should keep all the receipts for a project and then report the total on their 2009 personal tax return.
A new line will be added to the T1 General Tax Forms and the amount will appear on Schedule 1 as a non-refundable tax credit.
