How to Use New Home Buying Incentives to Your Benefit!

Incentives for first time home buyers, or for home owners to make improvements on their homes were included in the 2009 Federal Budget. Here are some examples of what is being offered:

RRSP Home Buyers Plan Improved

First time home buyers have had an increase in the withdrawal amount allowed from their RRSPs, from $20,000 to $25,000.

Money withdrawn from the RRSP is to be paid back within 15 years. If it is not, it will lose its tax deferred status, and if scheduled annual payments cannot be paid in full, the unpaid amounts must be reported as income.

Tax Credits For Home Buyers

First time home buyers have also seen some relief on a tax credit that can provide up to $750 in tax relief on the purchase of their first home. To qualify neither the homeowner, their spouse or common law partner can have owned and lived in another home in the year of purchase or any of the four preceding years.

Green Grants

Home and property owners can apply for grants of up to $5000 for making eligible energy-efficient improvements, such as upgrading furnaces, increasing insulation etc.

Tax Credits for Home Renovations

Now through January 31, 2010, homeowners can claim a tax credit for up to 15% of renovation expenses between $1,000 and $10,000. Listed below are some examples of what does and does not qualify:

Eligible
*renovating a kitchen, bathroom or basement
*new carpet or hardwood floors
*building an addition, deck, fence or retaining wall
*a new furnace or water heater
*painting the interior or exterior of a house
*resurfacing a driveway
*laying new sod

Ineligible
*purchase of furniture and appliances (e.g. refrigerator, stove, and couch)
*purchase of tools
*carpet cleaning
*maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, and pool cleaning)

For more information on housing related stimulus in the 2009 Budget, visit the Canada Revenue Agency website at www.cra-arc.gc.ca and search for “Home Buyers Plan.”