The recent (2009) federal budget proposed by the governing Conservative party contains a number of measures that are intended to stimulate the economy. It’s clear that the government feels that the housing market is a critical element of a robust economy from what is contained in the budget.
There are three key elements that are meant to support home owners and stimulate the housing market. They have introduced a new First-Time Home Buyers’ Tax Credit to make home ownership more attainable, expanded upon the Home Buyers’ Plan, and added a new Home-Renovation Credit intended to encourage construction.
First-Time Home Buyers’ Tax Credit
New home buyers can benefit from this new program. It’s designed to help first-time home buyers defray closing costs such as legal fees and land-transfer taxes. For homes bought after January 27th, 2009, a 15% tax credit would apply to closing costs of up to $5,000 (meaning a maximum tax savings of $750).
Further details on the First-Time Home Buyers’ Tax Credit can be found here.
Home Buyers’ Plan
The Home Buyers’ Plan has already been in place, allowing individuals to withdraw up to $20,000 from their RRSPs. However, the new budget allows individuals to withdraw up to $25,000 from their RRSPs, and couples to withdraw up to $50,000 (instead of $40,000).
This is the first increase in the withdrawal limit since the Home Buyers’ Plan was introduced in 1992.
Should you want to learn more about the Home Buyers’ Plan you can do so here.
Home Renovation Tax Credit
This is a temporary new program for those spending money on goods or services to improve their homes (between Jan 27th, 2009 and February 1st, 2010). You can claim a 15% credit against spending of between $1,000 and $10,000 with a maximum credit of $1,350.
This credit applies to work done on houses, cottages, or condominiums and the projects can range from finishing a basement to renovating a kitchen or bathroom, painting, or replacing an old furnace. Routine maintenance and appliances and electronics do not qualify.
Further information on the Home Renovation Tax Credit is right here.
You can read more information on Canada’s 2009 budget here.
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