BUDGET 2009: HOME RENOVATION TAX CREDIT
Good news! My roof is leaking. We noticed how bad it was getting last fall, when it rained and bits of plaster began to flake off the ceiling in the smallest bedroom upstairs. Lately, the problem hasn't gotten any worse, perhaps because
Assuming the glaciers retreat by spring, though, there's going to be trouble overhead. So was I ever glad to see Finance Minister Jim Flaherty's new temporary Home Renovation Tax Credit (HRTC). It will give a 15-per-cent tax credit, up to $1,350, on any home fix-it project that is "enduring in nature" and costs more than $1,000. What's the definition of "enduring in nature"? It appears to be anything that lasts longer than one year.
My new roof will certainly last longer than a year, unless I attempt the work myself, in which case it will take eight months to finish and will be leaking again three weeks thereafter. Luckily, I've already lined up a nice young man from
Thank you, Mr. Flaherty - and you too, Michael Ignatieff, for ensuring the budget will pass before the melting season begins. As tax policy, it is ridiculous. But the Commons is going to take care of my house. Why complain?
And the money would be in my pocket today, not next year at tax time, which means I could go out and, you know, stimulate the economy when it's really needed. Of course, I'd never abet such a scheme to deprive the federal treasury of even a tiny portion of its rightful $225-billion in revenue. Who would? It's morally wrong, and that's why home renovations in
It's a certainty that thousands of others will be taking up Mr. Flaherty on his generous offer to subsidize the home repairs they were planning to do anyway. And it's an equally sure thing contractors, painters and roofers will jack up their estimates accordingly, to claim a piece of the tax break for themselves. Maybe the
Anyway, it's a quite a change from the Finance Minister who once declared that the federal government is "not in the pothole business." Maybe not on roads and highways, but if the pothole is in your driveway,
If you lay a new carpet, that's worthy of a tax credit. But if you clean an existing carpet, it's not. What about a throw rug? The budget is not clear, but you've got to believe that someone, somewhere in the Department of Finance is considering the revenue implications of throw rugs versus carpets. Ah, well. The tax gurus need something to do, now that they've settled that bruising debate over the GST status of Timbits.
The most hilarious part isn't the arcane rulebook. It's the "examples" Finance officials have helpfully written to illustrate how the tax credit works. On page 129, Sally and Ed decide to replace their windows and insulation, and get tax relief of $1,350. Maybe next time they should inject some reality: "Sally and Ed decide to renovate their kitchen. After three months of arguing about it, Ed moves into the basement. The paint he buys to brighten his dismal new 'bachelor pad' is eligible for a tax credit, but the used couch is not."
And what will be the tax cost of all this hammering and painting and deck building and stimulating? About $3-billion over the next 14 months, Finance says. That's a lot of money, but it's nothing compared to the total cost of all the other exemptions and credits that governments have been inventing for years to suck up to this interest group or that industry.
Our tax system is riddled with these.
Many tax credits are legitimate. Who could seriously argue against giving a break for the cost of caring for young children, or the disabled, or educating university and college students? Those are in the public interest.
Fixing my roof is not. But I'll take the money anyway. Thanks again, Minister.