Are you thinking about renovating your home this year? If so, you can count yourself among a high percentage of Canadian homeowners, according to a released last week. Of the 1,000 people surveyed, 70 per cent intend to renovate.
Tracie Tesser, President and CEO of ResMor Trust, a residential mortgage company, says that declining home values are encouraging us to stay in our homes and update them, rather than move. But the recently introduced by the federal government and in effect this year is also making renos more popular. A full 39% of the polled homeowners planning to renovate said that the credit influenced their decision.
Among my friends, the tax credit is certainly a motivating force. One friend is planning a built-in wall unit for the family room before the tax credit deadline. Another is considering a kitchen makeover.
I'm thinking about finally landscaping my backyard and taming the trees threatening my children's swing set. But I'll only hire the gardener if I actually have the cash in hand this summer.
Many people plan to go into debt to take advantage of the tax credit.
While half of the homeowners surveyed will use their savings to pay for their renovations, 30 per cent will use their line of credit, 7 per cent will put the cost on their credit cards and 5 per cent will add the cost to their current mortgage.
The interest they'll be paying on the credit could very well offset the tax benefit. Some advise that, as tempting as it may be to take up the government's offer, only go for it if you have the bucks in the bank.
Are you one of the many homeowners considering a renovation this year? Will you be doing it with cash, credit, or by adding the cost to your mortgage?