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:

• 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 dependent, caregiver amount, or amount for an infirm dependent age 18 or older for the qualifying person, or could have claimed such an amount if:

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• 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 dependent amount, the individual was not married and not in a common-law partnership:
• in the case of the amount for an infirm dependent 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.