There are several tax credits available to assist seniors with renovations necessary to make their homes accessible and safe. The following tax credits were introduced at the beginning of the 2023 calendar tax year:
- Home Accessibility Tax Credit (HATC)
- Multigenerational Home Renovation Tax Credit (MHRTC)
In this blog, we will define each tax credit and discuss how seniors may qualify to receive them.
Home Accessibility Tax Credit (HATC)
This is a non-refundable tax credit for eligible home renovation or alteration expenses that assist a qualifying individual to stay in their dwelling. A qualifying individual is anyone who is 65 years of age or older at the end of the calendar year and who is eligible for the disability tax credit at any time in the year.
The HATC is a non-refundable credit of 15% on up to $20,000 of eligible expenses, allowing a maximum tax credit of $3,000 (15% x $20,000).
Qualifying expenditures include outlays or expenses made or incurred during the year that include building materials, fixtures, equipment rentals and permits that provide an alteration or renovation that is of an enduring nature and is integral to the dwelling. The renovation must either:
- allow the individual to gain access to, or be mobile or functional within the dwelling; or
- reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.
Multigenerational Home Renovation Tax Credit (MHRTC)
This is a refundable credit to assist with the cost of renovating an eligible dwelling to establish a secondary unit that enables a qualifying individual to live with a qualifying relation. A qualifying individual is anyone who is 65 years of age or older at the end of the calendar year and who is eligible for the disability tax credit at any time in the year. A qualifying relation means an individual who is at least 18 years of age and at any time in the year is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, nephew or common-law partner.
The costs must be incurred for an alteration that is of an enduring nature and be undertaken to enable the individual to reside in the dwelling with a qualifying relation by establishing a secondary unit. A secondary unit is defined as a self-contained housing unit with a private entrance, kitchen, bathroom and sleeping area.
The credit is available for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date
The MHRTC allows for a refundable credit of 15% on up to $50,000 of eligible expenses, allowing a maximum tax credit of $7,500 (15% x $20,000).
Additional details for both tax credits, including details on qualifying and non-qualifying expenditures for HATC and MHRTC can be found on the Government of Canada’s website.
Speak to your Welch LLP advisor to help assess whether you may qualify for these tax credits.
