OTTAWA - If you're thinking about that refurbished kitchen, or putting in an extra bathroom or a new deck, this may be the year to act, because the tax man will help with the bills.

Tuesday's federal budget offered a new renovation tax credit of up to $1,350 toward a wide variety of home improvements, from new carpets to a new lawn.

It was described as a "creative" move that will help many regular folks as well as the economy.

The one-year program, which is forecast to cost the federal government up to $3 billion, is cast as another job-creation measure.

"This is a good one, I think," said Kevin Dancey, CEO of the Canadian Institute of Chartered Accountants. "The construction sector does employ a lot of people."

John Hrynkow, president Canadian Homebuilders Association, said it could help keep skilled workers on the job at a time when home building starts are sagging.

"I think it's a great opportunity to stimulate the renovation business across Canada. Anything that we can inject into the economy is useful."

But it goes beyond construction workers.

It covers a variety of projects, including renovations to houses, cottages and condos.

In addition to major work such as rebuilding a kitchen or adding a bath, or finishing a basement, it also covers a lot of smaller upgrades.

New flooring or rugs, a new furnace or water heater, a refinished driveway, sod for the lawn, interior and exterior painting are all covered.

Catherine Swift, president of the Canadian Federation of Independent Business, said the program is a winner.

"It has the virtue of being easy to quickly implement," she said. "It will not only employ people who are renovators, but when you renovate you usually buy furniture ... there's other purchases attached to it.

"It's reasonably significant. It's $3 billion and that's not chump change."

The program offers a tax credit of up to 15 per cent of renovation costs over $1,000, up to a maximum of $10,000 in renovation costs. The maximum benefit is thus 15 per cent of $9,000 or $1,350.

That comes right off taxes owing, but isn't refundable, so if it exceeds the total tax bill, there's no refund.

There's a catch for some, however, because the tax people will want to see receipts.

Dancey said that will strike at the underground economy because the work will have to be documented and the GST paid. A reno done by a fellow who charges cash and leaves no paper trail won't get the tax break.

The credit comes one to a household, although any member may claim it.

It covers work contracted for or materials purchased between Tuesday and Feb. 1 next year. As Swift noted: "It's a fairly short time frame, so you're going to have to get cracking or lose it."

It doesn't cover things such as new furniture, household electronics or maintenance contracts for snow removal, pool cleaning and the like.

But householders who make energy-saving home improvements will be able to essentially double-dip because they are eligible for grants under the ecoENERGY retrofit program as well as the new tax credit.

The government estimates that about 4.6 million homes are eligible for the new program.