In late 2020, the Ontario government introduced a temporary tax rebate available just for the 2021 tax year, aimed at Ontario seniors. The Senior Home Safety Tax Credit is available to select Ontarians for expenses incurred relating to improving home safety and accessibility in 2021. With the end of the year fast approaching, the team at Edelkoort Smethurst Schein CPAs LLP wanted to provide an overview of the program and a reminder that in order to take advantage of this credit, all eligible work or upgrades must be completed before the end of December.
What is the Senior Home Safety Tax Credit?
The tax credit was introduced as part of the 2020 Budget, with the intention of encouraging Ontario seniors to stay in their homes longer by granting a rebate on home improvements designed to make the house safer and more accessible.
The credit provides a rebate of up to 25% of eligible expenses, to a maximum rebate of $2,500.00. The provincial government estimates that the rebate will translate to a savings of $30 million, for approximately 27,000 individuals. Beneficiaries of the credit may be Ontario residents age 65 or older in 2021 or individuals who live with senior family members.
Who is eligible for the Senior Home Safety Tax Credit?
The tax credit can be claimed by Ontario residents who will be at least 65 years of age in 2021 or those individuals who have a senior relative living in their home. The credit allows for a rebate of up to a quarter of all eligible expenses to a maximum total of $10,000 (translating to a rebate of up to $2,500). The credit applies on a per-household basis, meaning that if a couple were to complete $10,000 worth of renovations to improve safety or accessibility, they can apportion the credit between them on their individual tax returns as needed.
In addition, if a homeowner were to invite their senior parent to move into their home in 2021, for example necessitating the installation of a ramp to access the front door, the homeowner could claim 25% of the cost of the ramp (up to $10,000) on their personal income tax return.
What type of work is eligible for the Senior Home Safety Tax Credit?
Home improvements eligible for the tax rebate include anything done to make the home more safe or accessible, enabling a senior to stay in the home for longer, rather than relocating to long-term care or assisted living facility. Renovations made purely for esthetic reasons would not qualify. However, the list of qualifying improvements is varied and includes:
- Installing stability bars around a shower, tub, or toilet
- Installing a ramp, elevator, or stairlift
- Renovations to enable a senor to reside on the first floor of a residence, including the addition of a bedroom and/or bathroom
- The installation of handrails in a home
- Washroom upgrades, including the installation of a walk-in tub, accessible toilet, or a wheel-in shower
- Lowering existing kitchen or bathroom counters, or installing adjustable countertops
- Installation of non-slip flooring
- Widening doorways
- Installing hands-free faucets or light fixtures
- Installing an automatic garage door opener
Any upgrades, additions, or renovations designed to make it easier for a senior person to manage and stay in their home for a longer period of time will likely qualify for the tax credit. If you are unsure before you begin work, it may be worthwhile to contact your accountant for advice before you proceed.
How to Claim the Senior Home Safety Tax Credit
In order to claim the credit, the first and most important thing is to ensure the work or upgrades are completed within the 2021 calendar year. Once the work is done, be sure to keep records of all receipts, invoices, and any other supporting documentation. You can claim the credit on your 2021 personal income tax return or apportioned it between the returns of one or more homeowners if necessary. The tax credit is refundable, so even if you don’t owe taxes for 2021, you are still eligible to claim the credit.
Contact Edelkoort Smethurst Schein CPAs LLP in Burlington for Comprehensive Assistance with Personal and Corporate Tax Compliance
Edelkoort Smethurst Schein CPAs LLP in Burlington ensures clients are in full compliance with all personal and business-related tax obligations, while also working to maximize returns wherever possible. If you have questions about your eligibility to claim the Ontario Senior Home Safety Tax Credit, we can help.
Our Chartered Professional Accountants are highly skilled and serve individuals, families, and businesses throughout Burlington and the surrounding area. To speak with a knowledgeable member of our team, please contact us online or by telephone at 905-517-2297.