The 2015 federal budget announced the introduction of a new Home Accessibility Tax Credit (HATC), beginning in 2016.
The HATC is a non-refundable tax credit for qualifying expenses incurred for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual. A qualifying individual and eligible individuals can claim the HATC annually.
Qualifying individual – is an individual:
- who is 65 years or older before the end of the taxation year; or
- who is eligible to claim the disability tax credit at any time in the taxation year.
- Includes a spouse, common-law partner, and certain supporting relatives of a qualifying individual
- Certain Supporting Relative is an individual that has claimed the amount for an eligible dependant, caregiver amount or amount for an infirm dependent age 18 or older for the qualifying person
An eligible dwelling is:
- A housing unit located in Canada
- Must be the principal residence of the qualifying individual at any time in the tax year
The HATC applies to the total qualifying expenses, up to a maximum of $10,000 per year. The credit is at the lowest personal tax rate of 15%, so the maximum tax credit per year is $1,500 ($10,000 x 15%).
The HATC can be claimed for all eligible expenses during the tax year up to a maximum of $10,000, even if a portion or all of those expenses were also eligible expenses for the purpose of claiming the medical expense tax credit during that same tax year.
A qualifying renovation for the 2016 and subsequent tax years is a renovation or alteration that is of an enduring nature and is integral to the eligible dwelling. Generally, if the item purchased or work performed will not become a permanent part of your dwelling, it is not eligible. The renovation must:
- Allow the qualifying individual to gain access to, or to be mobile or functional within, the eligible dwelling; or
- Reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling
If you do the work yourself, you can still claim the amount that you spend on materials.
You will not have to submit your original receipts with your tax return but you should keep them in the event that they are requested by the Canada Revenue Agency.
Claiming the credit
A new schedule will be included in the 2016 tax return that allows us to list your eligible expenses and to calculate the amount of your claim.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.