Home Accessibility Tax Credit

The Home Accessibility Tax Credit (HATC) is a valuable financial incentive designed to make home renovations more affordable for seniors and individuals with disabilities. This credit aims to facilitate improvements that enhance mobility, safety, and functionality within the home, ensuring that individuals can live comfortably and safely in their own spaces.

Who is Eligible for the Benefit?

To qualify for the HATC, individuals must meet one of the following conditions:

• Be eligible for the disability tax credit.
• Be 65 years of age or older.
• Be an eligible individual making a claim for a qualifying individual. This includes spouses or common-law partners, as well as a wide range of family members such as parents, grandparents, children, grandchildren, siblings, aunts, uncles, nephews, or nieces. These family members must have claimed, or be eligible to claim, an amount for an eligible dependent, caregiver amount, or an amount for an infirm dependent aged 18 or older under specific circumstances.

Eligible Dwellings

A dwelling qualifies if it is located in Canada, owned by the qualifying individual, and is the individual’s ordinary place of residence. Alternatively, if the dwelling is owned by the eligible individual and is ordinarily inhabited by both the eligible and qualifying individuals, it qualifies, provided the qualifying individual does not own and ordinarily inhabit another dwelling in Canada throughout the year.

Qualifying Renovations

For renovations to qualify, they must be enduring, integral to the eligible dwelling, and meet one of the following criteria:

• Enable the qualifying individual to gain access to, or be mobile or functional within, the dwelling.
• Reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.

Qualifying renovations can include, but are not limited to, wheelchair ramps, walk-in bathtubs, wheel-in showers, and grab bars. Materials for work performed by the individual themselves may also qualify.

Financial Details

For the 2022 tax year and beyond, up to $20,000 in qualifying expenditures can be claimed, resulting in a tax credit of up to $3,000 for that year. This is a significant increase from the previous limit of $10,000 in qualifying expenditures, which offered a tax credit of up to $1,500.

Claiming the Credit

It’s important to note that individuals can claim both the HATC and the medical expense tax credit (METC) for the same expenses, provided they qualify for both. This dual eligibility allows for maximizing the financial benefits related to necessary home renovations for accessibility and health reasons.

Documentation and Proof

Individuals must ensure they have adequate documentation to prove that the renovations meet the HATC criteria. This includes demonstrating that the renovations are directly attributable to qualifying renovations and meet all conditions for being a qualifying expenditure.

Special Circumstances

The Act includes provisions for special circumstances, such as in the event of death or bankruptcy. For instance, if an individual dies during a calendar year and would have attained 65 years of age by the end of the year, they are deemed to have attained 65 years of age at the beginning of the year for the purposes of the HATC.

In conclusion, the HATC provides a significant financial incentive for seniors and individuals with disabilities to make necessary renovations to their homes. By understanding the eligibility criteria, qualifying renovations, and financial details, individuals can take full advantage of this tax credit to create safer, more accessible living environments.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2024 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.