Housing Sector Garners Attention in 2009 Budget
By now you’ve likely heard about yesterday’s proposed Federal budget. As expected, it includes some initiatives to stimulate the housing industry which is a darn good idea if you ask me.
Did you know that according to research conducted by the Altus Group for the Canadian Real Estate Association, each residential real estate transaction in Canada generates over $32,000 in ancillary consumer spending and, creates almost 95,000 full-time direct jobs as a result of that activity?
But back to the budget. For home owners and home buyers, it includes incentives as follows:
1. First-Time Home Buyers’ Tax Credit
Assisting first-time home buyers with tax releif of up to $750.00 for the costs associated with the purchase of a home such as legal fees, disbursements and land transfer taxes.
2. Increasing Withdrawal Limits Under the Home Buyers’ Plan
Raising the limit on withdrawals for first time home buyers from $20,000 to $25,000. With the $5,000 increase to the withdrawal limit, two first-time home buyers purchasing a home jointly (e.g. a married or common-law couple) with sufficient RRSP funds in each of their names may now together withdraw up to $50,000 from their RRSP funds toward the purchase of a home in Canada. Unlike regular RRSP withdrawals, the HBP withdrawals are not included in income when withdrawn. Amounts withdrawn under the HBP must be repaid over a 15-year period, starting the second year following the year of the withdrawal, or included in the individual’s income if not repaid.
3. Expanding the ecoENERGY Retrofit Program
Although not a new program, this measure provides an additional $300 million over two years allowing more homes to qualify.
4. Home Renovation Tax Credit
This is the one causing all the excitement today. This is a temporary program that will provide a 15-per-cent income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010. The credit may be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, and will provide up to $1,350 in tax relief.
I would add that, in my opinion, the 2 billion dollars being set aside for municipalities is also important to homeowners as it will have a direct impact on property taxes. In Collingwood for example, the local budget decision was deferred this week pending the budget to see what infrastructure projects (sewers?) might qualify.
When it’s time to buy or sell real estate in the Collingwood, Blue Mountain or Georgian Triangle area, contact Marg, an experienced and competent Broker who’s ready whenever you are!