The home renovation tax credit is back! This time you must be 65 years of age or older to claim it or, if you are younger than 65, you must share your home with someone who is at least that age. This refundable tax credit is calculated at 10% of the eligible expenditure incurred after March 31, 2012, to a maximum of $1,000 and is available to individuals who rent or own their home. The tax credit is aimed to assist with the cost of permanent home renovations for seniors which would allow them the flexibility to remain in their home longer.
A list of eligible expenditures will be available after legislation has been introduced. The government intends to include the following as eligible expenditures:
- upgrades to improve accessibliity, including handrails, grab bars, walk in bathtubs and wheel-in showers
- wheelchair ramps, lifts and elevators
- motion-activated lighting
- certain renovations to allow a first-floor occupancy or secondary suite for a senior relative.
Some expenditures that the government intends to exclude from eligibility:
- general maintenance, including roof repairs, windows, flooring, insulation and painting
- standard appliances
- medical monitoring equipment
- home security equipment
- services, such as home care.
If you spend $12,000 renovating your home to make it more accessible, then you could claim a $1000 Tax Credit.
$12,000 x 10% = $1200.00, but the maximum you can claim is $1000.00.
If you spend $8000 renovating your home to make it more accessible, then you could claim an $800 Tax Credit.
$8000 x 10% = $800.
Aquassure and Best Bath bathtubs, walk in tubs and accessible showers, ordered now, would be delivered and installed in March, so should qualify for this tax credit if you are a senior that owns your own home.
Generally, refundable tax credits mean that excess credits may be paid as a refund after your personal income tax return is assessed — even if you pay no income tax. This will be confirmed when the BC Government publishes the details of this program later this year, but it does seem to be their intention. This would be different than the medical tax credit, which is non-refundable and only reduces the amount of taxes that you pay.