OTTAWA - For homeowners thinking about a refurbished kitchen, that extra bathroom or a new deck, this may the year to act because the tax man will help with the bills.

Tuesday's federal budget included a renovation tax credit of up to $1,350 toward home improvements.

The one-year program, forecast to cost the federal government up to $3 billion, is cast as another job-creation measure.

"This is a good one, I think," said Kevin Dancey, CEO of the Canadian Institute of Chartered Accountants. "The construction sector does employ a lot of people."

The program covers a variety of projects, including renovations to houses, cottages and condos.

In addition to major work such as rebuilding a kitchen or bath, or finishing a basement, it covers a lot of smaller upgrades.

New flooring or rugs, a new furnace or water heater, a refinished driveway, sod for the lawn, interior and exterior painting are all covered.

The program offers a tax credit of up to 15 per cent of renovation costs over $1,000, to a maximum of $10,000.

The 15 per cent comes off taxes owing, but isn't refundable so if it exceeds the total tax bill, there's no refund.

The credit comes one to a household, although any member may claim it.

It covers work contracted for or materials purchased between Tuesday and Feb. 1 next year.

It doesn't cover things such as new furniture, household electronics or maintenance contracts for snow removal, pool cleaning and the like.

But householders who make energy-saving home improvements will be able to essentially double-dip because they are eligible for grants under the ecoENERGY retrofit program as well as the new tax credit.

The government estimates that about 4.6 million homes are eligible for the new program.

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