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Federal Home Accessibility Tax Credit (HATC)
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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.  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%).

The federal 2022 budget proposes to increase the annual expense limit of the HATC to $20,000, for expenses incurred in the 2022 and later taxation years.

Medical Expense Tax Credit

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 Individual

A qualifying individual is an individual:

bullet who is 65 years or older before the end of the taxation year; or
bullet 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

bullet includes a spouse, common-law partner, and certain supporting relatives of a qualifying individual
bullet 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:
bullet the qualifying individual has no income;
bullet for a qualifying individual who is a child, if that child had been 18 years of age or older in the tax year;
bullet in the case of the eligible dependant amount, the individual was not married and not in a common-law partnership:
bullet 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 Expenditure

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).

Qualifying Renovation

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

bullet allow the qualifying individual to gain access to, or to be mobile or function within, the eligible dwelling; or
bullet 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:

bullet 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.
bullet 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.

Tax Court Case - Patrie v. The Queen, 2019 TCC 276

Patrie v. The Queen was heard in November 2019 and was a win for the taxpayer.  The judge made it very clear that CRA can only use the applicable provisions of the Income Tax Act to determine eligibility for the tax credit. Resources

Resources for Persons with Disabilities

Federal and Provincial Home Renovation Tax Credits

Canada Revenue Agency (CRA) Resources

Home Accessibility Tax Credit (HATC)

Revised: April 07, 2022


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