What exactly is the Home Accessibility Tax Credit (HATC) and how does it function?

The home accessibility tax credit (HATC) is a non-refundable tax credit that helps individuals cover the costs of eligible home renovations. It is designed to improve accessibility for seniors and persons with disabilities, making their homes safer and more functional.

What are the eligibility requirements for the Home Accessibility Tax Credit (HATC)?

To qualify for the home accessibility tax credit, an individual must be at least 65 years old by year-end or be eligible for the disability tax credit. The renovations must be made to an eligible dwelling, typically their principal residence, to improve accessibility.

Which specific home renovations qualify for the Home Accessibility Tax Credit (HATC)?

Renovations that enhance mobility, reduce harm, or improve functionality for an eligible individual within their home qualify for the home accessibility tax credit. Examples include installing grab bars, building ramps, creating walk-in showers, or widening doorways. These improvements must be permanent and integrated into the dwelling.

What is the maximum amount that can be claimed through the Home Accessibility Tax Credit (HATC)?

For the home accessibility tax credit, you can claim up to $10,000 in eligible expenses annually for qualifying renovations. This non-refundable credit can reduce your tax owed to zero, but it will not result in a refund if the credit amount surpasses your tax payable.

Home Accessibility Tax Credit (HATC) Guide

Learn about the home accessibility tax credit (HATC) for qualifying renovations. Discover how this non-refundable credit can help with dwelling modifications.

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.

Eligible individuals

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

Eligible dwelling

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 credit

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.

Qualifying renovation

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.