Ontario proposes seniors’ renovation tax credit

The Ontario government proposed a temporary home improvement tax credit for seniors in its 2020 Ontario budget. The credit would allow seniors to stay in their homes for longer during the Covid-19 pandemic. 

The Seniors’ Home Safety Tax Credit would be a fully refundable tax credit for the 2021 tax year worth 25% of up to $10,000 in eligible expenses to make homes “safer and more accessible.” 

Expenses would be eligible if they are paid or become payable in 2021. The expenses must relate to renovations that improve safety and accessibility or help a senior be more functional or mobile at home. 

“The government has been committed to helping seniors stay in their home longer even before the pandemic,” the government stated in the budget documents. “But Covid-19 has underscored the urgency of this important priority.” 

Seniors would be eligible for the credit regardless of income and whether or not they had a tax liability for 2021. The $10,000 maximum in expenses applies per principal residence and could be shared among family members, including spouses, who live with the senior. The maximum credit would be worth $2,500.

Eligible expenses include renovations to permit first-floor occupancy or a secondary suite for a senior; wheelchair ramps, stair lifts and elevators; grab bars around a toilet, tub or shower; non-slip flooring; additional lighting; and automatic garage door openers. 

Individuals would be able to claim the credit for the expenses if the improvement was made to their principal residence or to a residence that they reasonably expect to become their principal residence within the 24 months after the end of 2021. The credit could also be claimed for an individual’s share of improvements done by a condominium corporation to property that includes the individual’s principal residence. 

If an improvement is paid for in installments, all expenses related to that improvement are considered paid when the final installment becomes payable. To be eligible for the credit, the final installment must become payable in 2021. 

The government said it expects the credit would benefit 27,000 people and cost about $30 million in 2021. Ontario says it will work with the Canada Revenue Agency to allow the credit to be claimable through the 2021 personal income tax return.  

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.