Cost Estimate for Bill C-323: An Act to amend the Income Tax Act (rehabilitation of historic property)

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Cost Estimate for Bill C-323: An Act to amend the Income Tax Act (rehabilitation of historic property).pdf

Summary
Bill C-323 is a private member’s bill that seeks to amend the Income Tax Act to create a 20 per cent tax credit for expenses related to rehabilitating a historic property, and to create a tax deduction for the capital cost of property used in the course of such rehabilitation.

PBO estimates that the annual cost of the credit will range between $55 million and $67 million in the first five years, if the average cost of rehabilitation and take-up rate of the credit are similar to projects undertaken in the United States for a similar credit.

As the table above shows, the major cost driver of the credit is large-scale projects (mostly commercial and industrial buildings). Even though there are considerably fewer large-scale projects, they generate a much higher cost for the credit because their costs are substantially higher than small-scale projects.

While there are costs associated with implementing the tax deduction for the capital cost of property used in the course of rehabilitation, PBO has deemed that they are not fiscally material.