Nearly two-thirds of Canadian renovators plan to take advantage of the federal government’s home renovation tax credit this year and close to half have done more renovations because of the tax break, according to a new RBC study.

The survey, conducted by Ipsos Reid, also found that 76% of Canadians who are planning to renovate will pay for most or all of it with cash or savings, compared with 70% in 2008, signaling a shift in the way Canadians view home improvement financing.

Fewer renovators, 24%, plan to use a credit card to finance their renovation this year, compared with 32% in 2008.

“It’s not surprising that Canadian renovators are getting smarter with their renovation financing and avoiding debt in light of the current economy,” says Marcia Moffat, RBC head, home equity financing. “Whether they plan to fix up and sell or renovate and stay, most are taking advantage of tax credits and incentives. They’re also planning to use cash or lower interest credit to finance those renovations.”

As for the biggest renovation headache, 30% of homeowners complained of going over budget while 32% said the time it took to complete the renovations was worse than expected.

“Renovating is often fraught with frustration and it’s easy for costs to rise by adding small projects until you’re over budget and behind schedule,” adds Moffat. “The best course of action is to expect the unexpected and prepare with advance planning, a realistic budget and flexible financing options at the outset.”

The pool was conducted by Ipsos Reid between September 8 -16.

IE