TaxTips.ca
Canadian Tax and
Financial Information
Federal Home Accessibility Tax Credit (HATC)

Ads keep this website free for you.
TaxTips.ca does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Looking for US tax information?
See
USTaxTips.net

Need an accounting, tax or financial advisor? Look in our Directory.      Stay Connected with TaxTips.ca!      Internet Explorer - Use compatibility view for calculators to work properly!

Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Directory
Advertise With Us
Contact Us/About Us
Links & Resources



Filing Your Return   ->   Home Renovation and Home Accessibility Tax Credits - Federal Home Accessibility Tax Credit (HATC)

Federal Home Accessibility Tax Credit (HATC)

Income Tax Act s. 118.041

The Home Accessibility Tax Credit, which is a non-refundable tax credit, was introduced in the Federal 2015 Budget, and received Royal Assent in June 2015, so is now law.  The credit is for qualifying expenses incurred in 2016 or later, for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual.  The HATC can be claimed by a qualifying individual or an eligible individual.

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 reduction per year is $1,500 ($10,000 x 15%).

Qualifying Individual

A 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.

If there are two qualifying individuals in the same principal residence, the maximum is $10,000 related to that principal residence.

Eligible Individual

  - 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 dependant age 18 or older for the qualifying person, or could have claimed such an amount if:
        - the qualifying individual has 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.

Qualifying Expenses

Expenses qualify if they are of an enduring nature and integral to the dwelling, when they are made in relation to a qualifying renovation or alteration to an eligible dwelling, including the land (generally, up to 1/2 hectare of land) that forms part of the eligible dwelling.  Generally, if the item purchased or work performed will not become a permanent part of your dwelling, it is not eligible.

Expenses do not qualify if the goods or services are provided by a person related to you, unless that person is registered to collect goods and services tax/harmonized sales tax (GST/HST).

If a qualifying expense also qualifies for the medical expense tax credit (METC), both the METC and the HATC can be claimed for the same expense.

Qualifying Renovation

A qualifying renovation is one of an enduring nature and is integral to the eligible dwelling.  The renovation must:

  - allow the qualifying individual to gain access to, or to be mobile or function 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.

Eligible Dwelling

An eligible dwelling is:

  - a housing unit located in Canada, which could be a share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the co-operative housing corporation.
  - the principal residence of the qualifying individual at any time in the tax year.

Generally, a housing unit will be considered to be a qualifying individual's principal residence where it is ordinarily inhabited, or expected to be ordinarily inhabited within that tax year, by the qualifying individual and it is owned, either jointly or otherwise, by the qualifying individual or the qualifying individual's spouse or common-law partner.

Although a person can have only one principal residence at a time, when a an individual moves during the year, there can be two principal residences during that year.  In such a situation, the HATC maximum of $10,000 applies to the total cost of qualifying expenses for both residences, NOT for each residence.

If the qualifying individual does not own a principal residence, a dwelling will be considered to be an eligible dwelling if it is the principal residence of an eligible individual in respect of the qualifying individual who ordinarily lives in that dwelling with the eligible individual.

If you earn business or rental income from part of an eligible dwelling, you can only claim the amount for qualifying expenses incurred for the personal-use areas of your dwelling.

See also:

    - Resources for Persons with Disabilities

    - Federal and Provincial Home Renovation Tax Credits

Canada Revenue Agency (CRA) Resources

    Home Accessibility Tax Credit (HATC)

Revised: September 19, 2017

 

Copyright © 2002 - 2017 Boat Harbour Investments Ltd. All Rights Reserved  See Reproduction of information from TaxTips.ca

Facebook  | Twitter  |  Google + |  Monthly Newsletter Sign-up  What’s New E-mail Notification RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.