Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Do the cost of alterations/modifications to a dwelling qualify as medical expenses?
Position: Question of fact.
Reasons: All the facts must be considered in order to determine if the modifications allow the person to be mobile or functional within, or gain easier access to the dwelling
XXXXXXXXXX 2004-007674
Lena Holloway, CA
September 17, 2004
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Medical Expense
This is in reply to your letter of May 17, 2004, wherein you requested our opinion on whether the costs of various alterations to your home would qualify for the medical expense tax credit.
Your letter explains that as a result of a stroke suffered in 1991, you are disabled and qualify for the Disability Tax Credit. You are considering making some changes to your home that would allow you to have easier access to the various facilities in it. In particular your letter listed the following:
The installation of a "peninsular" counter top with a stool for you to sit at when eating or reading as you have problems sitting at, and getting up from a regular table.
The cost of lowering the cabinets and installing slide drawers (instead of regular shelves), to give you easier access to them.
Installation of grab bars.
The cost of lowering the cabinets to give you access to them.
Installation of swivel windows to replace the sliding windows, which you have difficulty opening due to your coordination problems.
Installation of an automatic door opener as you find it difficult to get in and out of your car to manually open and close the garage door.
The building of a patio/deck for you to get in and out of your back door. This patio would be used for barbequing or sitting, particularly in the summer, as you have difficulty using the steps to your house from the back yard.
Written confirmation of the tax consequences inherent in a particular transaction or series of transactions is' given by this Directorate only where the transaction(s) are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. However, we are prepared to provide the following comments.
Section 118.2 of the Income Tax Act (the "Act") provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses. The relevant paragraphs of section 118.2 are discussed below.
In respect of the modifications to your home proposed in your letter, paragraph 118.2(2)(l.2) of the Act would be applicable. This provision includes as qualifying medical expenses, amounts expended "... for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, to enable the patient to gain access to, or to be mobile or functional within, the dwelling" ...
Therefore, assuming that your entitlement to the disability tax credit is due to a severe and prolonged mobility impairment, in order for the renovations or alterations contemplated in your letter to qualify as medical expenses under paragraph 118.2(2)(l.2) of the Act, the amounts expended must be reasonable and must be incurred to either enable you to gain access to, or be mobile or functional within the dwelling.
Your letter stated that the reason for many of the items in your list of proposed renovations is that you have "difficulty" with your current set-up. While these changes would make things less difficult for you, the modifications must allow you to gain access to, or be mobile or functional within the dwelling in order for them to qualify as medical expenses. The legislation implies that the modification must be undertaken to allow access, mobility, or functionality which was previously unavailable. For example, your proposed renovation to lower the bathroom cabinets to give you access to them would likely qualify as a medical expense. Each modification must be considered to see if it is made for the reasons outlined above.
If you require further assistance in this area, you may wish to contact the Client Services division of the Toronto North Tax Services Office. In order to support such a claim for medical expenses, you would normally need to provide a statement from your doctor that such modifications were necessary in order for you to gain access to certain parts of your house, or that the alterations were necessary in order for you to be mobile and functional within your home.
We trust you will find our comments to be of assistance.
Yours truly,
Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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