Any Canadian homeowner is no stranger to paperwork. Not only is there a great amount of paperwork associated with the purchasing of a home, but there is no shortage of t’s to cross and i’s to dot throughout the later years of homeownership, either — especially when tax season comes around.
However, some homeowners may not even realize that they are eligible for certain tax benefits, such as the home renovation tax credit. Canada offers a home renovation tax credit to homeowners who meet certain conditions — and knowing whether or not these conditions apply to you is one of the best ways to get the most out of your tax filing this year.
What is the Home Renovation Tax Credit?
In Canada, a renovation tax credit is available to any homeowner who makes a renovation that is designed to improve the life of any person living with a disability. This is more specifically known as the HATC or Home Accessibility Tax Credit. In order to be eligible for this credit, of course, there are certain conditions that must be met.
Who is Eligible for the HATC?
The Government of Canada’s HATC is available to anybody who has made a home improvement to increase the accessibility of their home for a senior or a person with a disability. The HATC allows claims of up to $10,000. This tax credit is non-refundable.
In order to be eligible, dwellings must be owned at least partially by the individual who qualifies. If you perform the work yourself, you will be eligible to deduct the costs of your building materials, plans, and permits. However, if you entrust the help of a professional contractor, you will also be able to claim this as an expense.
The Government of Canada determines whether or not a home renovation is eligible for a tax credit based on the following criteria:
- The renovation must have the end goal of allowing the individual to be more mobile within their home
- The renovation must be intended to reduce the risk of harm to the individual in question
- The individual must either be 65 years old or older or be eligible for the disability tax credit at any time in the current tax year
What is the BC Home Renovation Tax Credit?
Many provincial governments offer a tax credit for home renovations that is separate from the one offered by the federal government. For example, in British Columbia, this is the BC Home Renovation Tax Credit for Seniors and Persons With Disabilities. This credit is offered to seniors, or family members who live with a senior, and is notably available for both homeowners and renters.
The BC Home Renovation Tax Credit can amount to up to $1,000 per calendar year. In order to be eligible, individuals must already be claiming the federal government’s disability tax credit and must have been a resident of BC on the last day of the last tax year. They must also be a senior, i.e., 65 years or older.
There are also minimum requirements that the renovation must meet in order to be granted eligibility. The renovation must have been made with the purpose of improving mobility for the senior, or to reduce any risk in injury for the senior.
Are You Eligible For a Home Renovation Tax Credit in 2022?
Are you looking for a home improvement tax credit in Canada? In BC, seniors and persons with disabilities may be eligible for a home renovation tax credit. If you fall into this category, or are currently caring for someone who does, you could receive a home renovation tax credit in BC to help lessen the expenses. While this home renovation tax credit in BC does not cover aesthetic changes to your home, it can make the property a lot more functional for seniors and persons with disabilities. To be eligible, you must be:
- A BC resident, and
- A senior over the age of 65 or a family member living with a senior, or
- A person with a disability or a family member living with a person with a disability.
What Qualifies for a Home Renovation Tax Credit in Canada in 2022?
Since 2012, homeowners have been eligible to receive a 10% tax credit (or $1,000 per year) to improve the accessibility and functionality of their homes. While the changes made to your home may increase its value, that cannot be the purpose of the renovations to be eligible for this tax credit. Rather, the renovations must help reduce the risk of harm to eligible people by improving the mobility of the home. These types of renovations include lowering countertops and cabinets, widening doors and hallways to accommodate wheelchairs, replacing knobs with lever handles, installing walk-in bathtubs, and more. Under this claim, these home renovations are tax-deductible in Canada if they were completed after April 1st, 2012, were paid for out of pocket, and have yet to be reimbursed by your health insurance provider.
The following are commonly claimed home improvements that are eligible for the BC Home Renovation Tax Credit:
- Handrails, balance bars, etc
- New door locks
- Motion sensor lights
- Lowering countertops
- Non-slip flooring
- Touch-and-release infrastructure
- Door widening
- Elevators and wheelchair ramps
Certain repairs and home renovations, however, will not be eligible under this tax credit, such as:
- Landscaping or aesthetic changes
- Appliance upgrades
- Insulation changes
- Wheelchairs and walkers
- Smoke alarms and carbon monoxide detectors
- New roof, window, or flooring
Please note that these lists are not exhaustive.
Licensed Renovation Contractors in Kamloops
Founded in 2014, Interior Elite Contracting offers professional services completed by a trained carpenter. With customer service always at the forefront of our minds, our Kamloops renovation contractors are proud to offer renovation and building services in Kamloops that keep our customers happy. Contact us today to discover how we can help you out on your new home build, your kitchen renovation, and more — no job is too big or too small!