Tax credits available for renovations, first-time homebuyers
The 2009 Federal Budget offers up several financial breaks for first-time homebuyers and home-owners looking to improve the value of their homes through renovations. First-time buyers could see savings of up to $750 to alleviate closing costs by way of a $5,000 non-refundable income-tax credit on a qualifying home purchased after Jan. 27, 2009. This is welcome news for prospective real estate clients debat-ng whether they should wait for better financial times. Coupled with the Province of Ontario’s rebate of up to $2,000 for Land Transfer Tax for first-time homebuyers, potential savings are substantial. In a further effort to stimulate the housing market, the proposed budget offers to increase by $5,000 the maximum amount first-time homebuyers can withdraw from their RRSPs.
Under the Home Buyers’ Plan, $25,000 can now be withdrawn, up from $20,000, with the stipulation the money be repaid over a 15-year period, beginning in the second year after it is withdrawn. The budget also contains something for prospective sellers: A Home Renovation Tax Credit—a one-year, temporary 15 per cent income tax credit on eligible home renovation expenditures for work performed or goods acquired between Jan. 27, 2009 and Feb. 1, 2010. A credit may be claimed on eligible expenditures exceeding $1,000 but no more than $10,000, putting up to $1,350 back in the homeowners’ pockets. This provides a great opportunity for sellers deciding if they should spend money to complete a few renovations in order to make their homes more attractive to potential buyers.
If you have any questions, please do not hesitate to contact me at (613) 794-2899,