What is the Home Accessibility Tax Credit?
The Home Accessibility Tax Credit (HATC) is a non-refundable tax credit designed to help seniors and people with disabilities make necessary modifications to their homes to improve accessibility and safety.
How much is the Home Accessibility Tax Credit?
The credit is worth 15% of up to $10,000 of expenses per year, which can provide a maximum benefit of $1,500 per year.
Who is eligible for the Home Accessibility Tax Credit?
To be eligible for the Home Accessibility Tax Credit (HATC), one must either be a “qualifying individual” or an “eligible individual” making a claim for a qualifying individual.
A “qualifying individual” includes:
- Anyone eligible for the Disability Tax Credit (DTC) at any point during the year.
- Individuals who are 65 years of age or older by the end of the year.
An “eligible individual” is defined more broadly to include:
- A spouse or common-law partner of a qualifying individual.
- Close family members such as parents, grandparents, children, grandchildren, siblings, aunts, uncles, nephews, or nieces of a qualifying individual or their spouse/common-law partner. This category also includes those who can claim or could have claimed certain tax benefits on behalf of the qualifying individual, such as the amount for an eligible dependant, the Canada caregiver amount for a spouse or common-law partner, or for other infirm dependants aged 18 or older, under specific conditions relating to income, marital status, age, and dependency due to mental or physical infirmity.
What expenses are eligible for the Home Accessibility Tax Credit?
The Home Accessibility Tax Credit (HATC) does not cover several types of expenses.
First, costs associated with purchasing a property that can function independently from any qualifying renovations are not eligible. This means that buying a property with existing accessibility features does not qualify for the credit.
Regular maintenance or repair costs are also ineligible. These include annual or routine tasks meant to upkeep the property rather than specifically enhancing accessibility. Additionally, purchasing household appliances or electronic entertainment devices does not qualify, as these are not related to improving accessibility.
Expenses for services like housekeeping, security monitoring, gardening, and general outdoor maintenance are excluded. These services do not directly contribute to making a home more accessible.
Financing costs related to the renovations are not covered by the HATC either. Lastly, if a renovation primarily aims to increase the property’s value rather than its accessibility, it does not qualify for the credit. The focus of eligible expenses under HATC must be on enhancing accessibility for residents with disabilities.
Expenses are not eligible if the goods or services are provided by a person related to the qualifying individual or the eligible individual unless that person is registered for goods and services tax/harmonized sales tax (GST/HST) under the Excise Tax Act.
Why and when was the Home Accessibility Tax Credit introduced?
The Home Accessibility Tax Credit (HATC) was introduced by the Canadian federal government in 2015, as part of its commitment to support seniors and persons with disabilities in living independently. The inception of this tax credit reflects broader social and policy trends aimed at enhancing accessibility and quality of life within the aging population and those with physical challenges.
The HATC was officially proposed in the Economic Action Plan 2015 and was designed to help cover the cost of renovations that would make a home more accessible or reduce the risk of harm. This was in response to the high costs associated with home modifications, which could be prohibitively expensive for many individuals and families.