Friday, February 5, 2010

How condo owners can claim the Home Renovation Tax Credit

If the term "Home Renovation Tax Credit" brings to mind images of detached houses in the suburbs and not units in sky-high buildings, you're not alone. Many condo owners are paying little attention to the credit when they could be reaping the benefits.

In fact, there are many opportunities for condo owners to claim the credit, including some outside of their own units.

Condo owners can claim a portion of improvements made to their building between Jan. 27, 2009 and Feb. 1, 2010, as long as they were at least partially responsible for paying for the upgrades.

Here's how it works:
Assuming each condo owner pays a monthly fee to a condo corporation, repairs or renovations completed and paid for with that money should count toward the HRTC. The condo corporation is simply paying for these goods and services on behalf of all of the unit owners.
Condo corporations are unable to claim the credit because it is available only to individuals, so it's up to each person to claim his or her portion.

Therefore, on their 2009 taxes, condo owners can claim the credit for renovations to their own unit – similar to what would be done in a detached home, for example – as well as their share of any renovations to common areas paid for by the condo corporation.
This could include anything from new windows installed in your building to a redesigned lobby area or improved landscaping.

Add these shared costs with renovations you may have done to your individual unit (bathroom or kitchen upgrades, new fixtures, painting) and you could significantly increase your credit.
Canada Revenue Agency guidelines for condo owners indicate that improvements made to common areas will qualify if:

– You own your unit. Renters are out of luck, even if they pay similar monthly fees.
– "The expenses would be eligible expenses if the common areas were treated as an eligible dwelling" – if new furniture wouldn't count in a detached home, it won't count in a condo either.
– Your condo corporation has notified you of your share of the expenses.
As a reminder, the tax credit applies to renovation costs over $1,000 and under $10,000, so if you spent a few hundred dollars on your own unit and the condo corporation spent a few hundred more on your behalf, that may be the difference between getting a return or not.

What you'll need to make the claim:
Since you're not dealing directly with stores or contractors and won't receive original receipts or invoices, in order to claim your portion of building renovations you need documentation from your condo corporation. This can be in the form of a letter and must be signed.
Most condo corporations have a set of guidelines that help them determine the allocation of expenses for common areas. It is this documentation that will guide them in establishing each condo owner's contributions to renovations and therefore how much people can claim.
According to Canada Revenue Agency, the documentation "must clearly identify the type and quantity of goods purchased or services provided" and also include the following:
– The cost of the renovations
– Your portion of the expenses (exactly how much you are considered to have contributed)
– Contact information for the vendor or contractor (including GST/HST number, if applicable)
– A description of the work in question
– The date or dates the work was completed.
If you do not receive documentation for improvements to your building, it is worth asking about. It could mean a few more dollars in your pocket!

Sunday, January 31, 2010

Having a green home provides savings and peace-of-mind

When it comes to character, you just can’t beat the charm of an older home. Newly constructed homes however, come with their own unique assets, one of the most noteworthy of which is energy efficiency.

From the roof to the foundation, a number of innovative building practices often go into constructing today’s greenest homes.

Roof shingles for example, are now available in recycled materials. Environmentally friendly spray foam insulation, which can help prevent dampness, keep out pollutants and contribute to structural strength, is even partially made with recycled materials.

Roofs, walls and floors can be insulated as well with special structural panels that consist of two layers of board with insulating foam in between them. The forms that are used to mould a home’s poured concrete foundation can now also be found with insulating ability, and barriers that prevent dampness from rising into the foundation can be used at this stage of construction as well. Even exterior cladding is now insulated to offer greater energy efficiency.

If you prefer an older home though, there are many simple ways to make it more energy efficient and environmentally friendly.

Start with an Energy Star programmable thermostat that will save on heating and cooling costs when you’re not home. You can take this approach a step further by investing in a new high efficiency furnace or air conditioner. Adding insulation to the attic of your home will offer reduced energy costs for years to come as well.

A tank-less water heater will also save on energy costs by providing only the amount of heated water that you need rather than maintaining it in a cylinder.

Even making minor changes can have an impact, like choosing energy efficient light bulbs - Compact Fluorescent Lamps (CFLs) are good and Light Emitting Diodes (LEDs) are even better.

If you’re planning to make cosmetic changes to your home you can do your part for the environment by choosing wood flooring, and even carpet, made with recycled content. Look for low VOC paints and stains as well, which reduce the number of unstable, carbon-containing compounds that enter the air and react with other elements.

In the bathroom, you can keep more money in your pocket by installing low-flow faucets, showerheads and toilets.

Replacing old windows with low-E argon-filled units that have the Energy Star symbol can make a dramatic difference to your home’s energy efficiency as well.

Changing your old appliances with new Energy Star machines is also a great way to reduce energy consumption while enhancing the overall appeal of your home.

Beyond enjoying the aesthetics, cost savings and fulfillment associated with helping the environment, you can also consider getting an energy audit to take full advantage of a number of government rebates for energy-saving home improvements..

Regardless of the approach you choose, remember that nothing can substitute for good-old fashioned conservation. Remember that the energy you save today may well be the energy that is needed tomorrow.