Does the Home Accessibility Tax Credit Mean Anything to Your Way of Living?
In this year’s budget (2015) the government introduced a non refundable tax credit which is called the HATC (Home Accessibility Tax Credit). This pertains to expenses that can qualify for renovations to a dwelling of a person. There are three areas that need to be qualified. One is the renovation themselves, two is the dwelling, and third is the individual.
The qualifying expenses:
In general the renovation or alteration must once it is done become a permanent part of the dwelling, but there are exemptions to this. The claims that are being made must have a receipt to back them up. Again it will be important to review what types of expenses are eligible and those which are not before focusing on renovations that are going to give you this proposed tax break.
The qualifying dwelling:
The dwelling must be located in Canada, and it has to be the principal residence of the qualifying individual, within the tax year the credit is being claimed for. You need to read the rules carefully as to what will qualify as a eligible dwelling before going ahead with a bunch of renovations that you think you are going to get credit for.
The qualifying individual:
The individual has to be eligible for receiving or is able to claim the disability tax credit. Or the person has to be sixty five or older.
There is a maximum amount that you can claim which is $10,000.for the year. The end result if you were to claim this max. amount would be a $1,500. Non refundable tax credit.
As with anything to do with the tax, this proposed tax credit comes with a whole gambit of rules and regulations. This is understandable given the nature of the tax credit.
Some of the highlights to keep in mind is that if you are going to perform the eligible renovation yourself then your personal labour costs cannot be equated into the cost. If the renovation cost could have been covered by some other way such as a grant or forgivable loan, then it may not qualify for this tax credit. If you borrow money to have the renovation done, then the cost of borrowing is not included in the eligible amount.
What your decision should come down to is do you really need the renovation for the betterment of your lifestyle, or are you just looking at getting your taxes reduces. With so many rules and regulations it is really important that you look at this from all sides.