Ontario Seniors’ Home Safety Tax Credit

Fuller Landau Team • November 20, 2020

The Ontario government has introduced a temporary home improvement tax credit for seniors which may be relevant for yourself or a family member. The tax credit is meant to enable seniors to live in their homes for a longer period of time and avoid entering long-term care facilities which have been hard hit by COVID-19.

Who qualifies?

All seniors (65+ years as at January 1, 2021), regardless of income.

 What is it and how much is the credit?

This is a fully refundable tax credit for the 2021 tax year. It is worth 25% of eligible expenses up to $10,000, for a maximum credit of $2,500 per household.

What does fully refundable mean?

Seniors will receive the credit irrespective of whether they owe taxes in 2021 or not.

  • For example, if you spend $1,000, you will receive a tax credit of $250. If you owe taxes of $750, the credit will net against the taxes payable and you will owe taxes of $500 instead. If you do not owe any taxes for 2021, you will receive a refund of $250 on the filing of your tax return.
  • Note: since this relates to the 2021 year, the credit will be received in 2022 and after the filing of your 2021 tax return.

What are eligible expenses?

Eligible expenses are those that improve a residence’s safety or accessibility, or help a senior be more functional or mobile at home e.g. renovations to permit first-floor occupancy or a secondary suite, wheelchair ramps, stair lifts or elevators, grab bars in a bathroom, non-slip flooring, additional lighting, automatic garage door openers.

Other considerations

  • The improvements must be made to a senior’s principal residence (or a residence they reasonably expect to be their principal residence within 24 months after December 31, 2021).
  • Seniors who share a principal residence share the credit (i.e. spouses would together receive a credit of up to $2,500, they would not each receive a credit of $2,500).
  • Eligible expenses must be paid or become payable in 2021.
  • If an improvement is paid for in installments, all expenses for that improvement are considered to be paid when the final installment becomes payable. The final installment must become payable in 2021 in order to qualify for the credit.

As with all matters related to your taxes, please ensure you keep all receipts and supporting documentation.

Please contact your partner or manager if you have any questions or wish to learn more.