BILD Alberta calls for renovation tax credit
February 18, 2021
BILD Alberta wants the province to introduce a renovation tax credit to help the industry recover losses from the COVID-19 pandemic.
Executive director Scott Fash says a renovation tax credit would help boost the industry amid a sluggish economy.
"Effectively, it's a renovation tax credit, which is a refundable personal income tax credit for eligible renovation," Fash said.
He says the credit is a tool that's been used by a number of jurisdictions, and points to Saskatchewan as an example, noting, “If you spend $20,000 on a reno, you could get $2,100 back in a tax rebate.”
"The reason we're discussing this and we're developing a proposal for the Government of Alberta is it's really been shown historically to be an effective tool to help local and provincial economies, and nationally kind of emerge from really tough economic times," he added.
He added the Harper government introduced a temporary national renovation tax credit in 2009. Home renovation tax credits provided up to $1,350 in tax relief on home improvement projects of at least $1,000 but not more than $10,000.
Today, while there's already high demand for this sector, Fash says there's potential for even more growth.
Fash accepts the onus will be on BILD Albert to put forward a proposal that will win over the province.
Alberta’s Finance Ministry office appears cool to the idea because the government it is focused on supporting the hardest hit sectors of the economy and is not currently considering a home renovation tax credit. The office stated, "Compared to many other industries, home renovations have held up fairly well during the COVID-19 pandemic."
Fash says he thinks the benefit of a program could be cost neutral for the government and deter people from renovating using the underground economy.
"Yes, they are going to lose money on income tax rebates. But they are going to gain the majority, if not all, of that back, through increased employment taxes, increased corporate taxes, increased employment in general," he said.
"A big piece that often doesn't get talked about is you are pulling money out of the underground economy that isn't taxed historically."