Be careful about beating the taxman
February 27, 2010
Stephen Dupuis
If you missed the chance to take advantage of the Home Renovation Tax Credit, you still have an opportunity to beat the taxman by renovating prior to the July 1, 2010, effective date of the harmonized sales tax (HST), but you'll need to move quickly to find a professional contractor because the good ones are always booked ahead.
Barring any last minute good news in the pending federal budget to either extend the tax credit or introduce a permanent renovation rebate, come July 1, professional renovations will now be subject to an extra 8 per cent tax, for which you get zero added value.
Considering the provincial sales tax (PST) already imbedded in the average renovation, the price increase actually works out to 5.4 per cent, which is not insignificant when doing a kitchen or bath. Things really start to add up when you get into the additions.
While it's always nice to beat the taxman, rushing into the renovation process could backfire. Homeowners need to be careful not to hire the first contractor that knocks on their door. In fact, if someone is knocking on your door and ready to start immediately, you should ask yourself why.
I've been staffing BILD's Destination Renovation booth at the National Home Show this week and when homeowners ask what we're about, I explain BILD represents lowrise and highrise builders, as well as professional renovation contractors and associate members. The entire membership is subject to a national code of ethics while our renovation contractors agree to abide by a further, renovation-specific code of conduct under the auspices of our RenoMark program.
Under the renovation code of conduct, BILD's contractors agree to, among other things, provide a detailed, written scope of work, offer a minimum two-year warranty, carry all applicable licences and maintain a minimum of $2 million in liability insurance.
I add that while RenoMark is a great starting point for finding a contractor, it is no substitute for proper due diligence in checking out the contractor, including speaking to references.
While all RenoMark contractors are equal in terms of their commitments under the program, different contractors will see different solutions to the same renovation challenge. So, be sure to get a few quotes and don't take the best price unless it also happens to be the best solution. You should also feel you can enjoy a good working relationship with the contractor.
You can find a RenoMark contractor by visiting renomark.ca, selecting Greater Toronto Area, then accessing our searchable database of contractors by project specialty. You'll get a targeted list of contractors with links to each of their websites for further research.
This weekend only, you can also enjoy a "renovation conversation" with any of the professional renovation contractors staffing Destination Renovation (Booth 2523) at the National Home Show (national homeshow.com), on through Sunday at the Direct Energy Centre, Exhibition Place.
Destination Renovation also features "renovation inspiration,"a before and after photo gallery of 37 professional renovations and custom homes of all types and budgets.
The final component of Destination Renovation is free renovation information including the "RenoGuide: Five steps to a worry-free renovation" and the "Homeowner's Guide to Green Renovations."
If you happen to be at the show Sunday, I'm there from 2 p.m. to 6 p.m. and would be delighted to discuss beating the taxman or any other renovation queries you may have. See you at the show.
Stephen Dupuis is president and CEO of the Building Industry and Land Development Association. The views expressed are those of the president. Email: president@bildgta.ca.
Toronto Star