News Releases

TORONTO, May 27, 2010- One-in-three Canadian homeowners report that the elimination of two home improvement tax credits has had an impact on their renovation plans, according to a new BMO survey conducted by Harris/Decima.

The survey found that:

• Among Canadian homeowners, 32 per cent say they can either no longer afford to renovate or have had to delay their renovation due to the tax credits being eliminated
• 1 in 4 (25 per cent) of Canadian homeowners say they are moving forward with their home renovations as planned
• Women (13 per cent) are twice as likely as men (7 per cent) to say they can no longer afford to renovate

However, among Canadians looking to purchase a home within the next five years, the majority reported that their decision to buy a home that needed renovations was largely unaffected.

• 14 per cent have put on hold their plans to purchase a home that needs to be renovated
• 3 per cent are no longer able to afford to purchase a home that needs to be renovated.

"While the 2009 government home improvement tax incentives proved popular among homeowners, the fact they're no longer available doesn't need to dampen renovation plans," said Jane Yuen, Senior Manager of Mortgages, BMO Bank of Montreal. "A renovation can add tremendous personal enjoyment to your home as well as resale value. It comes down to your ability to finance the project along with meeting your overall financial goals with regards to how you see your home in your overall financial plan."

BMO Bank of Montreal suggests securing the financing prior to the renovation, such as a Homeowner Line of Credit or Homeowners ReadiLine, which provide the financial cushion most home renovators require. The advantage of these products is they give you the choice and control to call the shots, reduce the cost of borrowing and they're there when you need them.

To help homeowners who are considering renovations, Yuen offers the following tips:

• Understand how a renovation will impact the value of your home
  • Know what renovations create increased value and are popular selling features. For example, kitchens and bathrooms are common renovations that often increase the market value of a home, making them attractive rooms to focus renovations on.

• Think long term when making financial decisions
  • Whether you are spending cash from savings or borrowing to renovate your home, take the time to meet with a financial expert to ensure you know all the options. Ensure your renovation meets your long term financial objectives.

• Expect the unexpected
  • 31 per cent of survey respondents say they don't have an emergency fund to cover unexpected costs. Be financially prepared for the unexpected such as a leaky roof or a broken pipe.

• Get renovation quotes in writing and understand what guarantees they provide
  • For example; if the cost of the plumbing in your renovation is more work than expected, will the quote go up?