Refinancing to Take Advantage of the HRTC and Other Grants

With the announcement of the 2009 budget, the Canadian government has added another value added program to help Canadian homeowners, the Home Renovation Tax Credit (HRTC). This gives home buyers an opportunity to complete those renos they have been wanting to do for a tax credit. The HRTC can be combined with existing government rebates applicable to energy efficient home improvements to save you even more money. Here are some examples of how you can save money by refinancing your mortgage:

As part of the 2009 budget you may qualify for the Home Renovation Tax Credit (HRTC) of up to $1,350 for renovations completed by February 2010.

Did you know that you can receive a 10% rebate on the mortgage insurance premium (CMHC or Genworth) if your mortgage refinance is used to make your home more energy efficient? Plus, the extended amortizations of up to 30 or 35 years may be available without surcharge (.20% for every 5 years). Note: this rebate also applies to customers who purchase an energy efficient home

In addition to the 10% rebate, you may be eligible for additional federal and provincial grants of up to $10,000 under the Canada ecoEnergy Retrofit grant.

Additional benefits of the above programs:

Simple, energy efficient improvements are attractive because they offer lower monthly utility bills.

This translates into income for you, allowing you to free up income to qualify or buy a more expensive home (increasing your borrowing power).

You’ll increase the resale value of your home—an official EnerGuide label proves you’ve done the work

How do these programs work?

Description:

1. Mortgage Insurer

The rebate on the mortgage insurance premium applies to both Genworth and CMHC insured mortgages.
Premium Rebate

The rebate process is simple and can be done in 3 simple steps (see below):

1) Determine how energy efficient the home is:

a) If you are purchasing a home:

An energy efficient R-2000 model or and energy rating of 77+

Documentation certifying your home was built under either a Genworth or CMHC eligible energy efficient building program (Built Green Gold Label Homes AB, Novoclimat, Energy Star, Power Smart, R-2000)

Please refer to CMHC and Genworth website for a more detailed list.

CMHC

Genworth

b) If you are renovating an existing home:

Contact an NRCan qualified energy advisor to obtain the current energy rating for your client's home. The NRCan energy advisor will provide a list of straightforward recommendations to increase your energy rating.

Documentation certifying that the improvements made to your home has increased the EnerGuide rating by at least 5 points to a minimum rating of 40.

2) Apply for the Premium Refund

Please contact Laurie Baird for the CMHC or Genworth premium Refund forms or your broker or lender.

3) Submit the application along with the below documents

a) Purchasing a home:

Provide a copy of the first page of your EnerGuide evaluation report of R-2000 certificate.

b) Renovating existing homes:

Provide a copy of the fist page of both your pre-improvement and post-improvement EnerGuide evaluation report.

2. ecoEnergy Retrofit

Similar to the above Mortgage Insurer rebate, the ecoENERGY Retrofit grant is based on the type and number of energy efficient improvements made, and how energy efficient the improvements are. (This grant is applied once per house).

The best part is that the improvements are not complicated! For example, installing energy-efficient windows or basement insulation and purchases like high efficiency air conditioners and hot water heaters are eligible.

Obtain a home energy assessment before and after your upgrades

Complete the improvements either on your own or hire a contractor (Document your renovations with receipts, photos and product guides)

You have 18 months from the date of the first assessment to complete the upgrades and complete a second energy assessment.

Click here for more info on the ecoENERGY Retrofit grant:
ecoEnergy Retrofit Grant

3. Home Renovation Tax

The 2009 federal budget provides a temporary incentive for Canadians to implement new renovation projects or accelerate planned future projects.

The temporary HRTC provides a 15% income tax credit on eligible home renovation expenses for work performed or goods acquired after January 27, 2009 and before February 1, 2010.

The credit may be claimed for the 2009 tax year on eligible expenses over $1000 but not exceeding $10,000 and will provide up to $1350 tax relief.

Examples of HRTC Eligible and Ineligible Expenditures:

Eligible:

renovating a kitchen, bathroom or basement

new carpet or hardwood floors

building an addition, deck, fence or retaining wall

a new furnace or water heater

painting the interior or exterior of a house

resurfacing a driveway

laying new sod

Not Eligible:

purchase of furniture and appliances (fridge, stove, couch)

purchase of tools

carpet cleaning

maintenance contracts (furnace cleaning, snow removal, lawn care and pool cleaning)

Refinancing to Take Advantage of the HRTC and Other Grants