If you want to take advantage of the $1,350 home
renovation tax credit, you’ll need to get that renovation
done before February 1, 2010. So if it’s time for a new
roof, new flooring, or a fresh new recreation room . . .
this is the time to get it done.
Here’s the detail. For renovations done between January
28, 2009 and February 1, 2010, you’re eligible to
claim a 15% credit against your renovation expenses
after the first $1,000. The maximum tax credit is
$1,350, which represents $9,000 worth of renovations,
and comes directly off your taxes owing.

A wide range of renovation expenses qualifies for the
credit; go to the Canada Revenue Agency web site at
www.cra.gc.ca where there is a list of eligible expenses.
If your renovation project includes some energy-saving
home improvements, you may also be able to tap into
grant money under the ecoENERGY retrofit and other
government and local programs. You may therefore be
able to benefit from both of these incentive programs
for one renovation project.

But what about the upfront financing for larger
projects? If you’ve built some equity in your home,
you may be able to unlock the financing you need for
those projects. Assuming your current mortgage is
$150,000, here’s an example of how you can roll your
renovation cost into your mortgage and have one, easy
monthly payment. You can then use your prepayment
privileges to pay your renovation project off faster.
Want another reason to renovate now? It pays to
renovate. The right improvements will boost the value
of your home. So you’re building on your biggest
investment—while you enjoy your improvements every
day. Before you choose a renovation project, then, it’s
worthwhile to consider what the impact will be on
the appraised value of your home—in case you ever
want to sell. The Appraisal Institute of Canada
(www.aicanada.ca) has a good idea on which renovation
projects can maximize the value of your home—and
which ones just don’t pay, financially.

To check on the estimated payback, visit the RENOVA
section of the Appraisal Institute’s website (click on
Client Resources Centre), which has an interactive
web-based guide to the value of home improvements.
RENOVA is designed to give you a better idea of the
return on investment you can expect for a variety of
home improvements. You simply input the amount you
plan to spend on one of the 25 listed renovation types,
and you’ll receive an estimate of the effect this home
improvement project may have on the value or resale
of your home. Even if you are renovating for personal
reasons only—to improve the livability of your home–
it just makes good sense to understand how that
investment might payback in the value of your home.

In today’s great interest rate environment, homeowners
aren’t renovating just because they want to . . . but
also because they can. Many are taking advantage of
the Home Renovation Tax Credit, and incredibly
low mortgage rates to refinance their mortgages,
potentially saving thousands of dollars, while extracting
some of that equity for a renovation project or two.
If you’re interested in renovating, a great place to
begin is with a call to your mortgage planner.

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