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When Home Renovation Costs Can Be Medical Expenses

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If you or someone in your family has physical development challenges or a severe or prolonged mobility issue, accessibility changes to your home could save you on your taxes. Certain modifications are eligible for the medical expense tax credit (METC). The METC is worth the same as a deduction in the lowest tax bracket—which is about 21% in Ontario. It’s only available if your total qualifying medical expenses in any 12 month period ending in the current tax year exceed the lesser of 3% of your net income or $2100.

The most common types of eligible expenses include ramp construction, enlarging hallways or doorways, changing cabinet height and building elevators or stair lifts. You can also claim architect or engineering costs incurred in the renovation process.

There is a restriction. You can’t claim a renovation if it adds value to your home. A great example of this would be adding a hot tub or swimming pool. It may be necessary for therapy, but it also adds value.

The patient doesn’t need to own the home, but they do have to live there. That means modifications to rental properties or a relative’s house qualify as long that’s where the person with the disability lives.

There’s another area of coverage, too. You can extend the claim for modifications let help people in wheelchairs access a van. A portion of the cost of the van or the costs to adapt the van to make it accessible are eligible. The limit is the lesser of $5000 or 20% of the cost of the van.

A small disclaimer; as with most things you claim under the Income Tax Act, the home renovation expense must be reasonable in the circumstances.

For most small business tax planning and estate tax planning, being aware of every circumstance where there’s a chance to save on your tax bill really helps the big picture.

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