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Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Full Document:  

Act current to 2024-05-01 and last amended on 2024-01-22. Previous Versions

PART IIncome Tax (continued)

DIVISION EComputation of Tax (continued)

SUBDIVISION ARules Applicable to Individuals (continued)

Marginal note:Definitions

  •  (1) The following definitions apply in this section.

    eligible dwelling

    eligible dwelling of an individual, at any time in a taxation year, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of that land that exceeds the greater of ½ hectare and the portion of that land that the individual establishes is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if

    • (a) the individual (or a trust under which the individual is a beneficiary) owns — whether jointly with another person or otherwise — at that time, the housing unit or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation; and

    • (b) the housing unit is ordinarily inhabited, or is reasonably expected to be ordinarily inhabited, at any time in the taxation year

      • (i) by the individual, if the individual is a qualifying individual, or

      • (ii) by the individual and a qualifying individual, if

        • (A) the individual is an eligible individual in respect of the qualifying individual, and

        • (B) the qualifying individual does not, throughout the taxation year, own — whether jointly with another person or otherwise — and ordinarily inhabit another housing unit in Canada. (logement admissible)

    eligible individual

    eligible individual, in respect of a qualifying individual for a taxation year, means

    • (a) an individual who is the qualifying individual’s spouse or common-law partner in the year;

    • (b) except if paragraph (c) applies, an individual who is entitled to deduct an amount under subsection 118.3(2) for the year in respect of the qualifying individual or would be if no amount was claimed for the year by the qualifying individual under subsection 118.3(1) or by the qualifying individual’s spouse or common-law partner under section 118.8; or

    • (c) in the case of a qualifying individual who has attained the age of 65 before the end of the year, an individual who

      • (i) claimed for the year a deduction under subsection 118(1) in respect of the qualifying individual because of

        • (A) paragraph (b) of the description of B in that subsection, or

        • (B) paragraph (d) of the description of B in that subsection where the qualifying individual is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the individual, or of the individual’s spouse or common-law partner, or

      • (ii) could have claimed for the year a deduction referred to in subparagraph (i) in respect of the qualifying individual if

        • (A) the qualifying individual had no income for the year,

        • (B) in the case of a deduction referred to in clause (i)(A), the individual were not married and not in a common-law partnership, and

        • (C) in the case of a deduction under subsection 118(1) because of paragraph (d) of the description of B in that subsection in respect of a qualifying individual who is a dependant (within the meaning of subsection 118(6)) of the individual, the qualifying individual was dependent on the individual because of mental or physical infirmity. (particulier admissible)

    individual

    individual does not include a trust. (particulier)

    qualifying expenditure

    qualifying expenditure of an individual means an outlay or expense that is made or incurred, during a taxation year, that is directly attributable to a qualifying renovation — of an eligible dwelling of a qualifying individual or an eligible individual in respect of a qualifying individual — and that is the cost of goods acquired or services received during the year and includes an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation, but does not include an outlay or expense

    • (a) to acquire a property that can be used independently of the qualifying renovation;

    • (b) that is the cost of annual, recurring or routine repair or maintenance;

    • (c) to acquire a household appliance;

    • (d) to acquire an electronic home-entertainment device;

    • (e) that is the cost of housekeeping, security monitoring, gardening, outdoor maintenance or similar services;

    • (f) for financing costs in respect of the qualifying renovation;

    • (g) made or incurred primarily for the purpose of increasing or maintaining the value of the eligible dwelling;

    • (h) made or incurred for the purpose of gaining or producing income from a business or property;

    • (i) in respect of goods or services provided by a person not dealing at arm’s length with the qualifying individual or the eligible individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act; or

    • (j) to the extent that the outlay or expense can reasonably be considered to have been reimbursed, otherwise than as assistance from the federal or a provincial government including a grant, subsidy, forgivable loan or a deduction from tax. (dépense admissible)

    qualifying individual

    qualifying individual, in respect of a taxation year, means an individual

    • (a) who has attained the age of 65 years before the end of the taxation year; or

    • (b) in respect of whom an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year. (particulier déterminé)

    qualifying renovation

    qualifying renovation means a renovation or alteration of an eligible dwelling of a qualifying individual or an eligible individual in respect of a qualifying individual that

    • (a) is of an enduring nature and integral to the eligible dwelling; and

    • (b) is undertaken to

      • (i) enable the qualifying individual to gain access to, or to be mobile or functional within, the eligible dwelling, or

      • (ii) reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling. (travaux de rénovation admissibles)

  • Marginal note:Qualifying expenditure rules

    (2) For the purpose of this section,

    • (a) a qualifying expenditure in respect of an eligible dwelling of a particular individual — who is a qualifying individual or an eligible individual in respect of a qualifying individual — includes an outlay or expense made or incurred by a cooperative housing corporation, a condominium corporation (or, for civil law, a syndicate of co-owners) or a similar entity (in this paragraph referred to as the “corporation”), in respect of a property that is owned, administered or managed by that corporation and that includes the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, if

      • (i) the outlay or expense would be a qualifying expenditure of the corporation if the corporation were an individual and the property were an eligible dwelling of that individual, and

      • (ii) the corporation has notified, in writing, either the particular individual or, if the particular individual is an eligible individual in respect of a qualifying individual, the qualifying individual, of the share of the outlay or expense that is attributable to the eligible dwelling; and

    • (b) a qualifying expenditure in respect of an eligible dwelling of a particular individual — who is a qualifying individual or an eligible individual in respect of a qualifying individual — includes an outlay or expense made or incurred by a trust, in respect of a property owned by the trust that includes the eligible dwelling, to the extent of the share of that outlay or expense that is reasonably attributable to the eligible dwelling, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling (including, for this purpose, common areas relevant to more than one eligible dwelling), if

      • (i) the outlay or expense would be a qualifying expenditure of the trust if the trust were an individual and the property were an eligible dwelling of that individual, and

      • (ii) the trust has notified, in writing, either the particular individual or, if the particular individual is an eligible individual in respect of a qualifying individual, the qualifying individual, of the share of the outlay or expense that is attributable to the eligible dwelling.

  • Marginal note:Home accessibility tax credit

    (3) For the purpose of computing the tax payable under this Part by a qualifying individual or an eligible individual, in respect of an eligible dwelling for a taxation year, there may be deducted the amount determined by the formula

    A × B

    where

    A
    is the appropriate percentage for the taxation year; and
    B
    is the lesser of
    • (a) $20,000, and

    • (b) the total of all amounts, each of which is a qualifying expenditure of the individual in respect of the eligible dwelling for the taxation year.

  • Marginal note:Interaction with medical expense credit

    (4) Despite paragraph 248(28)(b), an amount may be included in determining both an amount under subsection (3) and under section 118.2 if those amounts otherwise qualify to be included for the purposes of those provisions.

  • Marginal note:Limits

    (5) For the purpose of this section,

    • (a) a maximum of $20,000 of qualifying expenditures for a taxation year in respect of a qualifying individual can be claimed under subsection (3) by the qualifying individual and all eligible individuals in respect of the qualifying individual;

    • (b) if there is more than one qualifying individual in respect of an eligible dwelling, a maximum of $20,000 of qualifying expenditures for a taxation year in respect of the eligible dwelling can be claimed under subsection (3) by the qualifying individuals and all eligible individuals in respect of the qualifying individuals; and

    • (c) if more than one individual is entitled to a deduction under subsection (3) for a taxation year in respect of the same qualifying individual or the same eligible dwelling and the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.

  • Marginal note:Effect of bankruptcy

    (6) For the purpose of subsection (5), if an individual becomes bankrupt in a particular calendar year, despite subsection 128(2), any reference to the taxation year of the individual is deemed to be a reference to the particular calendar year.

  • Marginal note:In the event of death and bankruptcy

    (7) For the purpose of this section,

    • (a) if an individual dies during a calendar year and would have attained 65 years of age if the individual were alive at the end of the year, the individual is deemed to have attained 65 years of age at the beginning of the year;

    • (b) if an individual becomes a qualifying individual during a calendar year and becomes bankrupt in that year, the individual is deemed to be a qualifying individual at the beginning of that year; and

    • (c) if an individual becomes a qualifying individual during a calendar year and an eligible individual in respect of the qualifying individual becomes bankrupt in that year, the individual is deemed to be a qualifying individual at the beginning of the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2015, c. 36, s. 8
  • 2017, c. 20, s. 14
  • 2022, c. 10, s. 5

Marginal note:Definitions

  •  (1) The following definitions apply in this section.

    qualifying home

    qualifying home in respect of an individual, means a qualifying home as defined in subsection 146.01(1) that is acquired, whether jointly or otherwise, after January 27, 2009 if

    • (a) the home is acquired by the individual, or by the individual’s spouse or common-law partner, and

      • (i) the individual intends to inhabit the home as a principal place of residence not later than one year after its acquisition,

      • (ii) the individual did not own, whether jointly or otherwise, a home that was occupied by the individual in the period

        • (A) that began at the beginning of the fourth preceding calendar year that ended before the acquisition, and

        • (B) that ended on the day before the acquisition, and

      • (iii) the individual’s spouse or common-law partner did not, in the period referred to in subparagraph (ii), own, whether jointly or otherwise, a home

        • (A) that was inhabited by the individual during the marriage to or common-law partnership with the individual, or

        • (B) that was a share of the capital stock of a cooperative housing corporation that relates to a housing unit inhabited by the individual during the marriage to or common-law partnership with the individual; or

    • (b) the home is acquired by the individual for the benefit of a specified person in respect of the individual, and

      • (i) the individual intends that the home be inhabited by the specified person as a principal place of residence not later than one year after its acquisition by the individual, and

      • (ii) the purpose of the acquisition of the home by the individual is to enable the specified person to live in

        • (A) a home that is more accessible by the specified person or in which the specified person is more mobile or functional, or

        • (B) an environment better suited to the specified person’s personal needs and care. (habitation admissible)

    specified person

    specified person in respect of an individual, at any time, means a person who

    • (a) is the individual or is related at that time to the individual; and

    • (b) would be entitled to a deduction under subsection 118.3(1) in computing tax payable under this Part for the person’s taxation year that includes that time if that subsection were read without reference to paragraph (c) of that subsection. (personne déterminée)

  • Marginal note:Rules of application

    (2) For the purposes of this section, an individual is considered to have acquired a qualifying home only if the individual’s interest (or for civil law, right) in it is registered in accordance with the land registration system or other similar system applicable where it is located.

  • Marginal note:First-time homebuyers’ tax credit

    (3) In computing the tax payable under this Part by an individual for a taxation year in which a qualifying home in respect of the individual is acquired, there may be deducted the amount determined by multiplying $10,000 by the appropriate percentage for the taxation year.

  • Marginal note:Apportionment of credit

    (4) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a particular qualifying home, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of the qualifying home, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 31, s. 4
  • 2022, c. 19, s. 17

Definition of eligible volunteer firefighting services

  •  (1) In this section and section 118.07, eligible volunteer firefighting services means services provided by an individual in the individual’s capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.

  • Marginal note:Volunteer firefighter tax credit

    (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual

    • (a) performs in the year not less than 200 hours of service each of which is an hour of

      • (i) eligible volunteer firefighting service for a fire department, or

      • (ii) eligible search and rescue volunteer service for an eligible search and rescue organization; and

    • (b) provides the certificates referred to in subsections (3) and 118.07(3) as and when requested by the Minister.

  • Marginal note:Certificate

    (3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the fire chief or a delegated official of each fire department to which the individual provided eligible volunteer firefighting services for the year, attesting to the number of hours of eligible volunteer firefighting services performed in the year by the individual for the particular fire department.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2011, c. 24, s. 25
  • 2014, c. 20, s. 7
 

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