Home Accessibility Tax Credit (HATC) for persons with disabilities

SUMMARY
Starting in 2016, Federal tax credits of up to $10,000 are available for qualifying expenses that help a Senior or a Disabled Canadian to access, be mobile in, reduce risk of harm within, or function better in an eligible dwelling. The tax credit can be claimed by the qualifying individual or certain relatives on line 398 of their income tax return by filling in Schedule 12 listing eligible home accessibility expenses.

In 2016 the government introduced a tax credit named the Home Accessibility Tax Credit (HATC). The program was designed to make home renovation expenses related to making living spaces more accessible for Canadians with disabilities and people over 65 years of age.

For 2016 and subsequent tax years, Budget 2015 introduces a non-refundable HATC 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.

Definition - Qualifying Individual
Any person who is over 65 years of age or has been approved for a Disability Tax Credit (DTC) qualifies for this tax credit. To see if you qualify for a DTC, you can click here..

Definition - Eligible Individual
An "eligible individual", not to be confused with a "qualifying individual", can claim the expense on behalf of a qualifying individual. Eligible individuals include a spouse, common-law partner, and certain supporting relatives of a qualifying individual. Certain supporting relative refers to 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, or could have claimed such an amount if:

• the qualifying individual had no income;
• for a qualifying individual who is a child, if that child had been 18 years of age or older in the tax year;
• in the case of the eligible dependant amount, the individual was not married and not in a common-law partnership;
• in the case of the amount for an infirm dependant age 18 or older, the qualifying individual who is 65 years of age or older at the end of a year and who is not eligible to claim the disability tax credit, the qualifying individual was dependent on the individual because of mental or physical infirmity.

Definition - Qualifying Renovation Expense
The expense must have been paid after Jan 1, 2016 and should be claimed in the tax year that it was paid. All qualifying renovation expenses must be long lasting and necessary (enduring and integral) for a qualifying individual to either:

1. gain access to living space
2. be mobile in the living space
3. function within the living space
4. reduce their risk of harm in the living space

There is no specific list of what specifically qualifies but as a general rule, if the item you purchase will not become a permanent part of your dwelling, it is not eligible.

Definition - Eligible Dwelling
An eligible dwelling is a housing unit located in Canada. It must be the principal residence of the qualifying individual at any time in the tax year. In the case where a qualifying individual does not own a principal residence, the principal residence of an eligible individual living with the qualifying individual becomes an eligible dwelling.

OTHER Q&A

Do I need to submit supporting documents at income tax filing time?
Supporting documents are not required to be submitted with your income tax return but should be available should CRA request them.

What year do I file the tax credit?
You claim the Tax Credit in the year the qualifying expenses were paid.

How do I claim this tax credit?
It is claimed on line 398 of Schedule 1 on your personal income tax return. An income tax schedule 12 must be completed and attached to your income tax return listing all expense amounts, dates, Supplier names, description of activities, GST #s of suppliers that are being claimed but you do not submit your receipts and proof of payment to CRA unless they ask for them at some later time in the future.

How much is this tax credit worth?
It is a non-refundable tax credit so it is only worth something to you if you pay federal income tax (i.e. line 420 of your tax return is greater than 0). If you paid more than $1,500 on line 420 and spend more than $10000 on eligible renovation expenses, this credit currently would get you an additional refund worth $1,500 (subject to change with changing tax rates). You could do multiple renovations in one dwelling to a maximum of $10,000 per dwelling.

Who can claim this tax credit?
Either the qualifying individual or an eligible individual on behalf of a qualifying individual can claim this tax credit as defined above. If it is more tax advantaged, the HATC can also be split between family members but not to exceed the maximum claim of $10,000 per eligible dwelling in any one tax year.

Can I get a Tax Credit for renovations done in the past and how many years back can we go?
Yes, the tax credit started for tax years after and including 2016 so as the years advance, you will be able to go further and further back unless a subsequent government cancels the tax credit. Generally, the CRA will allow you to amend a tax return for up to 10 years, however, it is important to note that this is not a taxpayer's right but rather something that the government calls a fairness provision.

Can I do the renovations myself or hire a family member to do them?
Yes, you can do your own renovations however, you will not be able to claim your labour as an eligible expense. You can also have a related person do your renovations but their labour will also not be eligible unless they are registered for GST/HST in which case their bills for eligible activities can include their labour.

I rent out part of my home. Can I renovate to make the space more accessible to my tenant?
No, you cannot claim the HATC for any space where rental income is being generated. If you are an eligible individual doing a qualifying renovation to a common area of your house that is used for both personal use and rental income, then you can pro-rate a portion of the expense based on use.

Can I claim this tax credit in combination with the Medical Expense Tax Credit (METC)?
Yes. If it qualifies for both tax credits then you can claim the same expense for both tax credits.

What does NOT qualify as an eligible expense for this tax credit?
While the eligible expenses that qualify is somewhat vague, there is a specific list made by the government of what DOES NOT qualify for the HATC as follows:

• to acquire a property that can be used independently of the qualifying renovation;
• that is the cost of annual, recurring, or routine repair or maintenance;
• to acquire a household appliance;
• to acquire an electronic home-entertainment device;
• that are the cost of housekeeping, security monitoring, gardening, outdoor maintenance, or similar services;
• for financing costs in respect of the qualifying renovation;
• made or incurred primarily for the purpose of increasing or maintaining the value of the eligible dwelling;
• made or incurred for the purpose of gaining or producing income from a business or property;
• in respect of goods or services provided by a person not dealing at arm's length with the qualifying individual or the eligible individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act; or
• to the extent that the outlay or expense can reasonably be considered to be have been reimbursed, otherwise than as assistance from the federal or a provincial government, including a grant, forgivable loan, or a deduction from tax.

OTHER Sources of Information
click here for the Canada Revenue Agency CRA current information
click here for the Canada Revenue Agency CRA Site on Line 398
click here for the Income Tax Act Section 118.041

Important Note:
This page is intended to be for informational purposes only and not tax advice. All information on this page is subject to changes beyond our control and may not be updated. You should consult with your professional tax advisor before you file any documents for tax purposes. We are happy to help in any way that we can.