Are you looking to renovate your home to make it more accessible for someone with a disability or a person over 65 years old? Discover the home accessibility tax credit, medical expense tax credit and the disability tax credit to help you get some money back. With the federal home accessibility tax credit, you can claim up to $10,000 in renovation expenses and receive up to 15% of the costs of renovating back on your tax refund.
Canada’s Ageing Population
According to Statistics Canada, citizens over the age of 65 outnumber children under the age of 15. First-ever in history, Canada’s working-age population is older than ever. The baby boomers are retiring at record rates and are thinking about home renovations for aging in place.
Similarly, our aging population is now wanting to live at home for as long as possible. In many perspectives, some seniors have an active lifestyle and are very capable to living independently in their home. Take the recent survey from the National Institute of Ageing (NIA)/TELUS Health Survey. Which indicated that almost 100 percent of Canadians 65 years of age and older, report that they plan on supporting themselves to live safely and independently in their own home as long as possible.
Seniors wanting to live at home can be more affordable for the government in a couple of ways. As funding is now shifted from long-term care facilities and into renovating homes. Significantly, hospitals can be alleviated from patients who are ready to be discharged from hospitals but for whom no appropriate home, community support or long-term care services are immediately available. Which comes the creation of the Home Accessibility Tax Credit in 2016. These tax credits are available to promote seniors to live at home (aging-in-place) and to help alleviate the financial burden of costly upgrades.
Home Accessibility Tax Credit (HATC)
This is a federal tax credit for those renovating their home for safety and accessibility. The Home Accessibility Tax Credit is for eligible individuals with disabilities (qualified for the canadian disability tax credit) and people who are 65 years of age or older at the end of the year. The HATC applies to total qualifying expenses up to $10,000 per year, resulting in a maximum tax credit of $1,500 ($10,000 x 15%). You claim the HATC when filing your annual tax return, so make sure you hang on to all of your receipts!
Who can claim the HATC?
It’s very simple to determine if you qualify for the home accessibility tax credit. If you are the elderly or disabled individual that the accessible renovations are being done for. To qualify as an elderly individual, you must be at least 65 years old by the end of the tax year. To be considered a disabled individual, you must qualify for the disability tax credit, see below for details.
If you are the spouse, common-law partner, or another related caregiver of a patient who meets the qualifications for the tax credit, you could claim the credit on your taxes. However, you must be mindful that both parties cannot claim the tax credit on their taxes.
Is my home qualified for the tax credit?
In order to qualify for the home accessibility tax credit, your dwelling must also meet certain requirements as well. The dwelling that you’re having the renovation done in qualifies for the tax credit if it is located in Canada and meets one of the following requirements:
- The housing unit is owned (at least partially) by the qualifying individual, and that qualifying individual lives there ordinarily.
- The housing unit is owned (at least partially) by the qualifying individual’s caregiver, and that qualifying individual and their caregiver lives there ordinarily.
To be clear, the qualifying individual can have more than one qualified dwelling within a year. However, they may only reside in one qualified dwelling at a time. This is an especially important distinction to make for individuals who move within the year. In the case that a qualifying individual has more than one eligible home in a year, that individual cannot claim more than $10,000 in renovation expenses across all of the dwellings.
What are the eligible expenses?
A qualifying renovation is an alteration of an enduring nature and is integral to the eligible dwelling (including the land that forms part of the eligible dwelling). Examples of home accessibility tax credit – eligible expenses:
- Grab bars and safety rails
- Replacing a bathtub with a roll-in shower, accessible shower or tub cuts
- Step-in or walk-in bathtub
- Wheelchair lifts
- Non-slip flooring or anti-slip treatments
- Switching to lever-style handles or faucets
- Widening your doorways
- Labour costs from professionals
- Permits for construction, and building plans
- Building materials and fixtures
- Outdoor or indoor ramps
- Lowering kitchen or bathroom cabinets so the person can use them
- Equipment rentals and more
If you are performing the renovation yourself, the labour cannot be counted in the expenses that are credited. Same goes if you get a family member to do the renovation, unless they are registered for the goods and services tax. For detailed information on the HATC visit the Government of Canada website.
Medical Expense Tax Credit
You may have an eligible renovation that also qualifies as a medical expense. If so, you can claim both the Canadian Medical Expense Tax Credit (METC) and the HATC. While these costs to renovate a home to accommodate the use of a wheelchair may qualify as medical expenses, types of expenses related to other impairments may also qualify. In all cases, keep receipts and any related documents to support your claim.
Disability Tax Credit Canada
The disability tax credit canada is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. An individual may claim the disability amount once they are eligible for the disability tax credit. This amount includes a supplement for persons under 18 years of age at the end of the year.
The purpose of the disability tax credit is to provide for greater tax equity by allowing some relief for disability costs since these are unavoidable additional expenses that other taxpayers don’t have to face.
If you are eligible for the disability tax credit, you may be able to claim both the Home Accessibility Tax Credit and Medical Expense Tax Credit for the same renovation or accessibility modifications. We encourage you to reach out to your financial planner or accountant to unlock all of your benefits.
For more information on eligibility or forms, visit the disability tax credit page on canada.ca.
Experts in accessibility renovations
You may be eligible to claim your home renovation expenses more than once, specifically three times! Many renovations to the home also count under medical expenses in addition to the HATC and disability tax credit. Seek advice from a financial or tax expert about how to take advantage of these credits and claim them properly.
Calling in professionals like us at Shift Accessibility to remodel your home is the best way to ensure tax credits will actually count. And most definitely renovated properly and aesthetically pleasing. All you have to do is call us and we can discuss your project and needs.