Overview: HATC vs METC
- The Home Accessibility Tax Credit (HATC) gives a non-refundable credit of up to $20,000 annually for eligible home renovation expenses to improve safety, mobility, or to reduce risk of harm—for seniors 65+ or those with the Disability Tax Credit (DTC) eligibility. (budget.canada.ca)
- The Medical Expense Tax Credit (METC) is also non-refundable and applies to medical and disability-related expenses surpassing the lesser of $2,834 or 3% of net income. METC can include home renovation costs in certain cases. (canada.ca)
What’s Changing from January 1, 2026
- Under draft legislative proposals (Budget 2025), expenses claimed under METC can no longer also be claimed under HATC for the same cost. That is, no double-dipping. (budget.canada.ca)
- Definition of “qualifying expenditure” in HATC will be amended to exclude any expense included in computing METC. §118.041(4) (which allowed dual claims) is repealed. (canada.ca)
- Effective date: January 1, 2026, for expenses incurred after December 31, 2025. (canada.ca)
Which Credit to Choose: Comparison Table
| Scenario | Prior rule (pre-2026) | New rule (2026+) | Key Considerations |
|---|---|---|---|
| Senior installs non-slip flooring (could be medical/home safety) | Could claim under both METC & HATC if meets eligibility | Must choose one; can’t claim same expense twice | Estimate tax benefit under each; HATC has $20,000 cap; METC depends on net income threshold |
| Renovation costs > threshold but no other medical expenses | Using HATC may maximize benefit because METC threshold expensive | Possibly better to allocate expense to HATC if large renovation and fewer medical expenses overall | |
| Many medical expenses overall | METC may offer greater cumulative deductions before the threshold hits | If METC exceeds the threshold largely, using METC generally beneficial |
Practical Example
Maria (age 70, qualifies for DTC) spends $10,000 in 2026 installing walk-in shower to help mobility.
- Under METC: she may need to exceed the lesser of $2,834 or 3% of net income before receiving benefit. Suppose 3% of net income is $1,500; so $10,000-1,500 = $8,500 multiplied by the federal tax credit rate (e.g. 15%) → about $1,275 credit.
- Under HATC: non-refundable credit rate also 15% up to $20,000 expense → $10,000 × 15% = $1,500 credit. Here HATC is better for this expense, unless Maria has significant medical expenses where METC yields more benefit overall.
Action Steps for Taxpayers & Advisors
- Audit past home renovations or medical-related renovations: mapping each expense to one credit to avoid errors or audits.
- Track total eligible expenses where thresholds matter (METC), and caps matter (HATC).
- For large home renovations in 2026+, do the math: allocate big expenses to HATC likely to get full benefit; smaller ones or recurring medical items still best under METC.
- Adjust tax preparation workflows to flag overlapping expenses. Ensure forms and schedules clearly allocate.
Compliance Considerations
- Receipts/documentation must distinguish purpose of renovation or medical functions. Keep detailed invoices showing purpose (accessibility, safety).
- Forms will be updated: check CRA forms for HATC Line 31285 and METC Lines 33099/33199.
- Consult CRA publications or Income Tax Act amendments for any changes to definitions of “qualifying expenditure”.
Bottom line: Starting in 2026, Canadians must choose between HATC or METC for the same expense—not both. Thoughtful allocation and record-keeping will let you maximize benefit.