The proposed federal budget is encouraging home renovation by offering  Home Renovation Tax Credit ( HRTC). This would give a boost to the economy and also help in creating job opportunities. 

HRTC would be effective instantly and would be available till Jan. 31, 2010. Homeowners can claim a tax credit for 15 per cent of renovation expenses between $1,000 and $10,000. The maximum tax credit (on $9,000 in renovations) is worth $1,350. 

"These measures to support home construction and renovation will help stimulate our construction and building-supplies industries," Federal Finance Minister Jim Flaherty said in his speech. "This in turn will support forestry and other Canadian industries. It will give an immediate boost to our economy, and help to create jobs."

It is estimated that the total value of the tax credit will be  about $3 billion, and  about 4.6 million families would take advantage  of HRTC.

The tax credit would be applicable to a variety of home improvements, such as renovating a kitchen, bathroom or basement, new carpet or hardwood floors, building an addition, deck, or fence, installing a new furnace, painting the inside or outside of a house, or laying new sod. However, repairs and maintenance are not covered under the scheme. Similarly tax credit would also be unavailable for purchase of appliances and equipment.