The Federal Budget 2009, passed on February 3, 2009 offers a $7.8 billion package to homebuyers and renovators which includes the following initiatives.
Home Renovation Tax Credit (HRTC): This temporary program provides an income tax credit on eligible home renovation expenses for work performed or goods bought after January 27, 2009 and before February 1, 2010. Homeowners can claim a tax credit for 15 per cent of renovation expenses between $1,000 and $10,000 for a maximum credit of $1,350. There is no tax credit for less than $1,000. New additions, decks, carpeting, floorings, heating systems and landscaping qualify. Furniture, appliances, tools and maintenance contracts do not qualify.
First-Time Home Buyers' Tax Credit: This new tax credit program provides up to $750 in tax relief to eligible first-time home buyers for costs associated with buying their first home, including legal fees and land transfer taxes.
ecoENERGY Retrofit program: This new funding provides home and property owners grants of up to $5,000 to offset the costs of making energy-efficiency improvements.
Homebuyers' Plan: This is an increase to the RRSP withdrawal limit to $25,000 from $20,000 for eligible homebuyers. The plan, first introduced in 1992, has not had a withdrawal limit increase. Eligible couples can now withdraw up to $50,000.
The Board estimates indicate that a couple buying a townhome in Metro Vancouver with a benchmark price of $423,338 will save $7,448 on their mortgage (at a five per cent rate amortized over 25 years) as a result of being able to use an additional $10,000 of their RRSPs.