“My 69-year-old mother now lives with us, and we had to make renovations to our home so that she could be safe after her accident at her personal care home. Can we write off the costs of those renovations?” It’s not an uncommon question this year as Canadians coped with the stress of the pandemic. The Home Accessibility Tax Credit can provide some financial relief in these cases.
This non-refundable credit is available for the cost of renovations or alterations to a dwelling that allow a taxpayer who is 65 or older or who is eligible for the disability amount, so that these individuals may gain access to or be more mobile or functional within the dwelling.
The requirements for the renovations are similar to those for claiming renovations for disabled individuals as a medical expense. In a rare double-dip allowed by the Income Tax Act, where the expenditure qualifies for both credits, both credits may be claimed.
For the 2020 tax year, the Worksheet for the Return is again used to enter the information relevant to the claim. The following definitions from the CRA are helpful in determining who qualifies:
"Eligible Dwelling". To qualify for the Home Accessibility Tax Credit, an eligible dwelling must be a housing unit owned by an individual that is ordinarily inhabited, or be reasonably expected to be ordinarily inhabited, at any time during the taxation year by:
An eligible dwelling includes the land subjacent to the housing unit and up to 1/2 hectare of contiguous land (or more, if necessary, for the use and enjoyment of the housing unit as a residence).
"Eligible Individual". An "eligible individual" in respect of a "qualifying individual" is eligible to claim the Home Accessibility Tax Credit if they have claimed any of the following credits in respect of the qualifying individual:
"Qualifying Expenditure". A "qualifying expenditure" of an individual means an outlay or expense that is made or incurred during the taxation year in respect of a qualifying renovation of an eligible dwelling. This includes:
Expenditures for the following do not qualify for the Home Accessibility Tax Credit:
"Qualifying Individual". A "qualifying individual" means an individual…
"Qualifying Renovation". A "qualifying renovation" means a renovation or alteration of an eligible dwelling of a qualifying individual or an eligible individual in respect of a qualifying individual. The renovation or alteration must be of an enduring nature, integral to the eligible dwelling and must be undertaken to:
Excerpted from the 2021 Advanced Personal Tax Update Course as featured during the January 20 Virtual CE Summit. This course provides all the most recent tax updates to filing the 2020 tax return. You can still enrol in the course online.