Tax Credits and Deductions: Corporate Renovations in Canada

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Without careful planning and a corporate specialist, the corporate renovation you’re planning might well drain your company’s finances. Most companies don’t realize it, but there are several tax deductions and tax credits by which they can benefit while undergoing a corporate renovation. With D.J. McGauley & Associates and the appropriate tax deductions, the costs of your office renovation will be much lower than usual.

Maintenance & Repairs

One important deduction is in Line 8960 for expenses accrued in maintenance and repairs. This will allow you to deduct the cost of labor, maintenance and repairs for any maintenance work and minor repairs for the property you use to earn income.  This applies to parts of your office that have not undergone major repairs but have nonetheless undergone maintenance and improvements. Excepted from this deduction is the value of your own labor and costs of repairs that are capital in nature, which are deductible in the next section.

Capital Cost Allowance

Undergoing a corporate renovation will inevitably mean the acquisition of new capital assets, which may qualify as a deduction under capital cost allowance. This deduction applies to furniture, equipment, and technologies acquired for the use of business or professional activities. While you cannot deduct the entire cost of the property right away, you can deduct its depreciable cost over time depending on its estimated lifetime.

Supplies

While undergoing a renovation, you might make use of supplies that would otherwise not qualify under the two preceding sections. This is where you can apply for a deduction under this section. Here, you can deduct items that the business used indirectly in its business, allowing certain refurbishments done to your workspace that are not directly related to your business goals to be deductible.  

Accounting, Legal and Other Professional Fees

A renovation will require external professional advice or services that will entail consulting fees. For such expenses, you can apply for a deduction under this section. With this deduction, you can put to rest any fears that consultation with specialists will only increase the costs of your renovation.

Provincial Land Tax Rebate

If you plan on leaving the commercial building for a period of at least 90 consecutive days, you may qualify for a rebate of the tax you have already paid.

Make sure to tune in next week as we discuss Tax Deductions and Credits in Corporate Relocation in Canada.

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