As many of you are aware, the Federal Budget was yesterday. The following is how it effects us in relation to the Real Estate market. Any feedback, questions or opinions can be made on my Blog. It will be a great forum to start conversations and to read what others have to say regarding some of these new policies. I will be Blogging under this entry title in the next few days with my personal opinion of what I feel some of the effects will be. Today I’m sending you just the basic outline of what was presented yesterday.
The Salisbury Team – providing you with up to the minute real estate information.
INCREASED HOME BUYERS’ PLAN WITHDRAWAL LIMIT
To encourage home ownership and home construction, the budget proposes to increase the Home Buyers’ Plan (HBP) withdrawal limit to $25,000. Currently,the HBP allows you to borrow up to $20,000 tax-free from your RSP to purchase or build your first home. This increase in the HBP withdrawal limit will apply to the 2009 and subsequent calendar years for withdrawals made after January 27, 2009.
NEW HOME RENOVATION TAX CREDIT
The 2009 budget proposes to introduce a temporary Home Renovation Tax Credit (HRTC) to encourage Canadians to invest in home improvements. A non-refundable tax credit of 15% will apply to eligible expenditures over $1,000, and up to $10,000 resulting in a maximum credit of $1,350 ($9,000 x 15%). If you are not able to use the entire credit the unused portion may be claimed by your spouse,common law partner or minor child living at home, provided you do not exceed the single $1,350 maximum credit. This credit will only apply to the 2009 taxation year for eligible expenditures made after January 27, 2009 and before February 1, 2010 and supported by receipts. The credit will not apply to home improvement expenses that are based on an agreement entered into before January 28, 2009.
Costs for renovations or alterations of an enduring nature to a qualified principal residence will qualify for the HRTC. This means that if you have both a home and a recreational property that can qualify as a principal residence, you can claim the HRTC for renovation expenses on one, the other, or both. Such costs will include the cost of labour and professional services, building materials, fixtures,equipment rentals and permits. Alterations such as furniture, appliances, audiovisual electronics, routine repairs and maintenance and financing costs associated with a renovation would not qualify for the HRTC.
NEW FIRST-TIME HOME BUYERS’ TAX CREDIT
The budget proposes to introduce a new non-refundable tax credit for first-time home buyers who acquire a qualifying home after January 27, 2009 (a qualifying home is one that is currently eligible for the Home Buyers’ Plan). First-time home buyers will be able to claim a 15% non-refundable tax credit on an amount of $5,000, for a maximum credit of $750 in the year the home is purchased. If a home is purchased jointly, the total credit that may be claimed by all purchasers combined is $750. The credit will also be available for certain acquisitions of a home by or for the benefit of an individual who is eligible for the disability tax credit (DTC).