Federal Budget 2009: Home Renovation Tax Credit/Deduction/Refund and More
If you are financial fanatic like myself, you may have already heard all about the 2009 budget. This federal budget was meant to spur spending due to the tough economic times that we are going through. And spend is what they did! We now have our first deficit in 12 years, $34 billion worth, and we’ll remain in the red until 2012-2013 or so.
Unfortunately, I missed the official speech, but I did catch up via the GlobeInvestor.com highlights. Even though there wasn’t a big announcement like the Tax Free Savings Account (TFSA) of last year, there were a few bright spots.
Here are the budget highlights that stood out for me:
Personal Tax Cuts
- Basic Personal Amount Increased. In 2009, you can now make more money tax free, it’s not a lot, but every bit counts. The basic personal amount will be $10,320 (from $9,600).
- Personal Tax Cuts. In addition to raising the basic personal amounts, they have also raised the ceiling on the first two tax brackets. This will allow more money to stay in the 15% (raises to $40,726) and 22% (raises to $81,452) tax brackets. This is great news as I plan on making more money in 2009. ;)
- Home Renovations. Tax credit towards a home renovation with minimum spending of $1,000 and maximum of $10,000. This basically amounts to 15% cash back, up to a maximum of $1,350 (the first $1,000 gets no tax credit). I guess 2009 is a perfect year to fully develop my basement!
- First Time Home Buyers. This lucky group has a couple of doozies in this federal budget. First, they get a tax credit on up to $5,000 worth in expenses on their first home. Since this is a federal tax credit, they would get 15% back which is up to $750 cash back. In addition to this, the withdrawal ceiling on the RRSP Home Buyers Plan (HBP) has increased to $25,000 from $20,000.
- Lower Taxes for Small Business. I’ve written about private corporations and their taxation a few times before. Previously, small business could make up to $400,000/year and pay a reduced tax rate. This budget has increased this limit to $500,000. Now, if only I could figure out how to make $500,000/year on a small business. :)
- Cheaper Computers. They have temporarily allowed small businesses to claim 100% capital cost allowance on computers until Feb 1, 2011. Typically, only a portion of the cost of a computer is claimed every year. They must have been reading my mind because I really could use a new desktop.
There are also other notables such as increasing the maximum employment benefits claim period from 45 weeks to 50 weeks, higher transparency requirements by credit card lenders, and starting a federal financial literacy program.
If you have a bit of time, you can read about the whole budget speech here.
What part of the budget stands out for you?