governement policy

Own Investment condos? Look at the Home Renovation Tax Credit

Most people associate the Canadian government’s Home Renovation Tax Credit (or HRTC) with detached family homes and larger properties; rarely do they think about the investments they own, or if they do, the investment condos. 

What is the HRTC? 

In the government’s own words:

Under proposed changes, the HRTC is a non-refundable tax credit based on eligible expenditures incurred for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, under an agreement entered into after January 27, 2009. The HRTC can be claimed when filing your 2009 tax return.

The HRTC can be claimed for renovations and alterations of an enduring nature and that are integral to the eligible dwelling (such as your home or cottage) or the land that forms part of the eligible dwelling.

How is the HRTC calculated?

The 15% non-refundable tax credit can be claimed on eligible expenditures of more than $1,000 but not more than $10,000. The maximum tax credit that can be claimed to reduce your federal income tax is $1,350. However, if the total of your non-refundable tax credits is more than your federal income tax, you have no federal income tax to pay, and you will not receive a refund for the HRTC.

If you haven’t looked at how your ownership on Condominiums will benefit you come tax time, you should ask your accountant.  More info from the The Toronto Star here:

Condo owners can claim a portion of improvements made to their building between Jan. 27, 2009 and Feb. 1, 2010, as long as they were at least partially responsible for paying for the upgrades.

Here’s how it works:

Assuming each condo owner pays a monthly fee to a condo corporation, repairs or renovations completed and paid for with that money should count toward the HRTC. The condo corporation is simply paying for these goods and services on behalf of all of the unit owners.

Condo corporations are unable to claim the credit because it is available only to individuals, so it’s up to each person to claim his or her portion.

Therefore, on their 2009 taxes, condo owners can claim the credit for renovations to their own unit – similar to what would be done in a detached home, for example – as well as their share of any renovations to common areas paid for by the condo corporation.

This could include anything from new windows installed in your building to a redesigned lobby area or improved landscaping.

Add these shared costs with renovations you may have done to your individual unit (bathroom or kitchen upgrades, new fixtures, painting) and you could significantly increase your credit.

Canada Revenue Agency guidelines for condo owners indicate that improvements made to common areas will qualify if:

– You own your unit. Renters are out of luck, even if they pay similar monthly fees.

– "The expenses would be eligible expenses if the common areas were treated as an eligible dwelling" – if new furniture wouldn’t count in a detached home, it won’t count in a condo either.

– Your condo corporation has notified you of your share of the expenses.

As a reminder, the tax credit applies to renovation costs over $1,000 and under $10,000, so if you spent a few hundred dollars on your own unit and the condo corporation spent a few hundred more on your behalf, that may be the difference between getting a return or not.

Contact your condo corporation today and ask them for a report on your proportional share of work done to the complex. If you own several investment condos, your savings can be substantial. 

For more info on investing in a condo in Kitchener Waterloo, Ontario, contact me at 519.772.4376 or send me an email today

governement policy

A Cambridge perspective on Kitchener Waterloo’s amalgamaltion

The following is a guest post by Vince Jelenic. You can find his contact info at the bottom of the piece.  These views represent Vince’s opinion; if you’d like to share yours, please contact me.  This post originally appeared at More on Kitchener Waterloo’s possible Cambridge-less amalgamaltion

Hi, I’m Vince Jelenic, a resident of Cambridge, and owner of a local business called Green Spot Antiques – TwoJJs.  Benjamin asked for some of my thoughts on the recent talks about the possibilities of  Kitchener & Waterloo municipal amalgamations.   My viewpoint is one of a general resident of the region, and I claim no expertise or special interests.

The fact that two municipalities such as Kitchener & Waterloo (KW) would at some point amalgamate is a given, or almost.  As an outsider when I travel to KW I see only one city.

When I was a child, my mother used to clean houses for wealthy Toronto residents in the Avenue Rd & St. Clair area.  I remember how when we got to ALMOST our destination, there would be a second ticket to pay on the streetcar.  There was this invisible line somewhere on the road, and if we crossed it , it cost more.  Sometimes on nicer days, we would “choose” to walk the few extra blocks. That extra ticket line functioned as a reminder how the two sections of town were connected, but quite distinct, both in terms of wealth, provenance, and services. 

In KW today, there is still a two-ticket zone mentality but in the end it is the consumer who pays – each citizen.  There are many areas where rationalizations and savings could be obtained through amalgamation, and even standards of service raised to equivalent standards.  This is a good thing.  Toronto outgrew it’s two-ticket zones years ago,  KW should too.

Recent talks have indicated how Cambridge, the third partner in this Region of Waterloo, is not to be privy to these talks.  I understand this is by choice and by design.  We, in Cambridge have been very reluctant interlocutors with regards to amalgamation of our municipalities. 

While some of it may be due to the fierce pride of local residents, and their ties to history, I think it is more due to the “marginalization” rationale. We are at the “ends of the earth” for the Region, at it’s borders, so to speak.

We sit on the outskirts of Waterloo Region  — with our City Hall in Galt, the southernmost part of the three municipalities. So let’s call us “outskirters”, just for fun.

We, in Cambridge, are also made up of three smaller village cores, each with it’s own sense of history, and there are internal struggles within our own municipality for services. Witness the previous debates on  the “proper” placement of our new City Hall .

For Kitchener, was there ever a doubt as to where their new City Hall should be?   Yes, give or take a block, perhaps. Kitchener has a downtown; we don’t -not really. 

And that is the problem of “critical mass” which Cambridge has to live with.  As part of the Region, we can very seldom benefit from new initiatives because we cannot bring critical mass to the table of needs and benefits. We have a tough time doing that even within our own municipality. 

Most services are built from Hubs, made sustainable, and then extend outwards to reach all an area’s citizens.  Cambridge will never be the Hub of this Region.  We know that, and fear it.

A KW amalgamation puts Cambridge in the very disadvantageous position of now dealing with a true HUB mentality up north of the 401, an economic powerhouse..  While Cambridge is oft-times under represented today in Regional Government, we can only imagine that representation being further eroded in the “new Region” with KW amalgamated.

In all countries, “outskirters’ are often the last to benefit from the gains of their economy. It is a natural occurrance due to fiscal and resource restraints.  On the other hand, outskirters are first to be courted to by the neighbours.  Of course, both parties, would love the free flowing tax dollars from the “outskirters” for their own. 

As an immigrant from a border area I know that feeling well. I come from Istria, a peninsula close to Trieste, Italy, and our conquerers (friendly neighbours) have changed a multitude of times since before the early Romans. A fiercly proud populace in a veritable “no man’s land”. 

If we look at Cambridge geographically, and culturally,  we probably have more in common with our southern neighbours such as Paris& Brantford,  than we do with Waterloo or Kitchener today. In terms of distance, both are closer to Galt than Waterloo is, for example. Perhaps a KW amalgamation is a good thing, it may help Cambridge reconsider it’s struggles with the north and make us concentrate on increasing our collaborative efforts with the south. 

While the Region markets Waterloo & Kitchener to the world, and the HUB of activity grows with leaps and bounds to the north of us, perhaps we can make OUR little neck of the woods a more pleasant place to live.  So much so that the go-getters from Waterloo will consider Cambridge a prime place to reside, even if they have to work in Waterloo. They may even take comfort in our historic downtown and river settings. 

Cambridge has a choice here: either remain an “outskirter” in Waterloo Region, facing a tougher and larger opponent to the north, or become a HUB of it’s own for a different concept of growth.  

We are a small town.  We should stop acting like a big city.  So far, in doing so, we’ve not only lost our identities, our downtowns, but also our shirts – our economic drivers.

I believe KW amalgamation will have the effect of finally putting the roaring Cambridge dog to rest so that it concentrate on it’s own house a little more and make it a more lively and comfy place.

However, it should be kept in mind that within the Region, “taxation without proper representation” will lead to larger problems later.  There are many instances where the “centralization” or “regionalization” of services has lead to a total disregard for Cambridge interests. To continue down that path during a KW amalgamation period would only add obstacles in the way of a productive change.

So, yes, please leave Cambridge out of it. It’s best for all parties. There is much to be said in recognition that one’s place in a partnership will not actually lead to profit.  It puts a stop to wasted energy. 

Cambridge is full of energetic people, and is a great community.  It just might begin to concentrate on itself more. 

governement policy

GST Rebates & Investing in New Construction Rental Property

In January, a number of our clients are closing on new construction rental properties, mainly in Cambridge Ontario’s Maple Grove community (355 Fisher Mills Road, north of 401, at Hespeller Rd). A few of these clients are new Real Estate Investors, and were not aware that you could apply for a GST Residential Rental Property Rebate (link goes to the Revenue Canada site hosting the rebate application).

Most people know that there is no GST payable on residential resale properties, and that there are rebates when buying new construction to live in, but not that they may be eligible to claim a GST/HST rebate when buy a newly constructed rental property, or “substantially renovate” a residential rental.   The property must be under $350,000 , and there is a partial rebate available if the fair market value falls between $350,000 and $450,000

From the Governement’s form:

“Use this form if you purchased or built a new residential rental property, substantially renovated a residential rental property, made an addition to a multiple unit
residential complex, converted a commercial property into a residential rental property, or leased land for residential purposes.
You have to send appropriate documents with your application (we accept photocopies). See the guide RC4231, GST/HST New Residential Rental Property
Rebate, for details. We may audit your rebate claim.”

You can find the form here: GST Residential Rental Property Rebate