[40] Bill 2 Royal Assent (PDF)

Bill 2 2012

An Act to amend the Taxation Act, 2007 to implement a healthy homes renovation tax credit

Note: This Act amends the Taxation Act, 2007.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 84 (1) of the Taxation Act, 2007 is amended by adding the following paragraph:

  16.  A healthy homes renovation tax credit under section 103.1.1.

   (2)  Subsection 84 (2.1) of the Act is amended by adding the following paragraph:

    3.  The tax credit referred to in paragraph 16 of subsection (1), with respect to taxation years ending after December 31, 2011.

   (3)  Subsection 84 (3) of the Act is amended by striking out "paragraphs 1, 2, 3, 12, 12.1, 13, 14 and 15" in the portion before clause (a) and substituting "paragraphs 1, 2, 3, 12, 12.1, 13, 14, 15 and 16".

   2.  Part IV of the Act is amended by adding the following section:

Healthy homes renovation tax credit

   103.1.1  (1)  An individual, other than a trust, who is resident in Ontario on the last day of a taxation year ending after December 31, 2011 may claim an amount in respect of and not exceeding the amount of his or her healthy homes renovation tax credit.

Determination of tax credit

   (2)  The amount of the tax credit under this section for a taxation year ending after December 31, 2012 is determined with reference to qualifying expenditures made or incurred during the taxation year for listed improvements to a qualifying principal residence. 

Same, 2012 taxation year

   (3)  The amount of the tax credit under this section for a taxation year ending before January 1, 2013 is determined with reference to qualifying expenditures made or incurred after September 30, 2011 and before January 1, 2013 for listed improvements to a qualifying principal residence.

Information concerning tax credit

   (4)  An individual who wishes to claim the healthy homes renovation tax credit may contact the Ministry of Finance to obtain information concerning the tax credit, including the following:

    1.  A list of appropriate organizations that may be able to provide any of the following:

            i.  General advice about qualifying for the tax credit.

           ii.  Review of quotes from contractors to ensure that the quotes are reasonable.

          iii.  A list of experienced contractors who have successfully worked on projects that have qualified for the tax credit or any similar tax credits.

    2.  Any other information that may assist the individual in determining whether he or she may qualify for the tax credit.

Amount of tax credit

   (5)  The amount of an individual's tax credit under this section for a taxation year is equal to the amount calculated using the formula,

A  B

in which,

  "A"  is 15 per cent, and

  "B"  is the lesser of $10,000 and the amount by which "C" exceeds "D", where,

         "C"  is,

                 (a)  for a taxation year ending before January 1, 2013, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual after September 30, 2011 and before January 1, 2013 and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

                 (b)  for a taxation year ending after December 31, 2012, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual during the taxation year and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

         "D"  is the total of all amounts each of which is received or receivable by any person, or that can reasonably be expected to be received by any person, in respect of a qualifying expenditure of the individual referred to in "C" and that is,

                 (a)  provided under any program that is designed to provide assistance with the cost of the construction, alteration or renovation of a residence or land on which the residence is situated and that is financed by a municipal, provincial or federal government,

                 (b)  provided as a forgivable loan from a municipal, provincial or federal government and that is designed to provide permanent or temporary assistance with, or financing for, the cost of the construction, alteration or renovation of a residence or land on which the residence is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

                  (c)  provided under any program that is prescribed by the Minister of Finance for the purposes of this subsection.

Eligible individuals

   (6)  An individual is eligible to claim a tax credit under this section for a taxation year if the individual is described in any of the following paragraphs:

    1.  The individual is a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

    2.  The individual is a qualifying relation of a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

Qualifying principal residence

   (7)  A qualifying principal residence of an individual for the purposes of this section for a taxation year is a residence located in Ontario,

  (a)  that is, if the individual is a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year or a residence that is reasonably expected to become the principal residence of the individual within 24 months after the end of the taxation year; or

  (b)  that is, if the individual is not a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year and that is, at the same time, also the principal residence of a qualifying relation of the individual who is a senior at the end of the taxation year, or a residence that is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year.

Listed improvements

   (8)  The following are listed improvements for the purposes of this section:

    1.  An improvement,

            i.  that is part of a renovation or alteration of a residence or of the land on which the residence is situated, or that is part of the construction of the residence, that can reasonably be considered to be undertaken,

                  A.  to enable a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) to gain access to, or to be mobile or functional within, the residence or the land, or

                  B.  to reduce the risk of harm to a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) within the residence or the land, or in gaining access to the residence or the land,

           ii.  that,

                  A.  is of an enduring nature and that is integral to the residence or the land, or

                  B.  relates to the purchase and installation of a modular or removable version of an item of a type that can otherwise be installed as a permanent fixture to the residence or land on which it is situated (such as modular ramps and non-fixed bath lifts),

          iii.  whose primary purpose is not to increase the value of the residence or the land, and

          iv.  that would ordinarily be undertaken by, or on behalf of, a person who has an impairment to enable him or her to gain access to, or to be mobile or functional within, his or her residence or land.

    2.  An improvement that is prescribed by the Minister of Finance for the purposes of this section.

Same, prescribed exclusions

   (9)  An improvement is not a listed improvement if it is prescribed by the Minister of Finance as ineligible for the purposes of this section.

Qualifying expenditures

   (10)  A qualifying expenditure is an outlay or expense made or incurred by, or on behalf of, an individual that is directly attributable to a listed improvement by the individual and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the listed improvement, but does not include such an outlay,

  (a)  to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation of the individual;

  (b)  made or incurred under the terms of an agreement entered into before October 1, 2011;

   (c)  to acquire a property that can be used independently of the listed improvement;

  (d)  that is the cost of annual, recurring or routine repair, maintenance or service;

  (e)  to acquire a household appliance;

    (f)  to acquire an electronic home-entertainment device;

  (g)  for financing costs in respect of the listed improvement;

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

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

Rules re qualifying expenditures

   (11)  The following rules apply with respect to qualifying expenditures for the purposes of this section:

    1.  Subject to paragraph 2, a qualifying expenditure is deemed to have been paid on the earlier of the date on which the expenditure was paid and the date it became payable.

    2.  If a qualifying expenditure in respect of a single listed improvement is paid by an individual in two or more instalments, the total of all instalments shall be deemed to have been paid on the earlier of the date on which the last instalment was paid and the date it became payable.

    3.  A qualifying expenditure that is paid or deemed to have been paid after September 30, 2011 and before January 1, 2012 shall be considered to have been paid on January 1, 2012.

    4.  A qualifying expenditure made by an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation 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 principal residence of the individual, to the extent of the individual's share of that outlay or expense,

            i.          if the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were the principal residence of that natural person, and

           ii.          if the corporation has notified the individual, in writing, of the individual's share of the outlay or expense.

    5.  A qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust in respect of a property owned by the trust that includes the principal residence of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the principal residence of the individual (including, for this purpose, common areas relevant to more than one principal residence),

            i.          if the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were the principal residence of that natural person, and

           ii.          if the trust has notified the individual, in writing, of the individual's share of the outlay or expense.

    6.  The following rules apply if more than one individual is entitled to claim a tax credit under this section for a taxation year in respect of a single residence that is the qualifying principal residence of all of the individuals at the same time during the taxation year or is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year:

            i.          The total amount of qualifying expenditures that may be claimed by all of the individuals in respect of the residence cannot exceed $10,000.

           ii.          If the total amount of qualifying expenditures claimed by all of the individuals in respect of the residence is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    7.  The following rules apply if an individual and any individual who is the individual's qualifying spouse or qualifying common-law partner on December 31 of a taxation year are both entitled to claim a tax credit under this section:

            i.  The total amount of qualifying expenditures that may be claimed by the two individuals for the taxation year cannot exceed $10,000.

           ii.  If the total amount of qualifying expenditures claimed by the two individuals for the taxation year is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    8.  An outlay or expense is not a qualifying expenditure unless the work to implement the listed improvement (to which that outlay or expense is directly attributable) begins within a reasonable time after the outlay or expense is made or incurred.

Part-year residents

   (12)  Subject to the following rules, an individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had been resident in Canada throughout that period.

    2.  For taxation years of the individual ending after December 31, 2012, the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

Bankruptcy

   (13)  Subject to the following rules, an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had not become bankrupt.

    2.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending in a calendar year after December 31, 2012 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of the calendar year if the individual had not become bankrupt.

Bankruptcy, senior

   (14)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is not a senior but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Same, qualifying relation

   (15)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Death in year

   (16)  If, when an individual dies, he or she is not a senior but would have become a senior by the end of the calendar year in which he or she dies, the individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (17)  If, when an individual dies, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year in which the death occurs, the deceased individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (18)  If an individual is a qualifying relation of another individual who, immediately before death, is not a senior but who would have become a senior by the end of the calendar year in which he or she dies, the individual who is the qualifying relation is eligible to claim a tax credit under this section for a taxation year that ends in the calendar year as if the other individual had not died.

Money appropriated by the Legislature

   (19)  The money required for the purposes of this section shall be paid out of the money appropriated for the purposes by the Legislature.

Financial disclosure

   (20)  The Minister of Finance shall ensure that the appropriate annual financial reports compare the anticipated cost of the credit for a year against the actual cost of the credit for the year.

Relation to other credits

   (21)  Despite paragraph 248 (28) (b) of the Federal Act as it applies for the purposes of this Act, an individual may include the same qualifying expenditure for the purpose of determining his or her tax credit under this section and for the purpose of determining his or her entitlement to the tax credit under subsection 9 (20) of this Act.

Definitions

   (22)  In this section,

"qualifying relation" of an individual means a person who is connected or related to the individual in any manner described in subsection 251 (6) or 252 (2) of the Federal Act; ("proche admissible")

"senior" means, despite subsection 98 (1), an individual who is at least 65 years of age. ("personne âgée")

Commencement

   3.  This Act comes into force on the day it receives Royal Assent.

Short title

   4.  The short title of this Act is the Healthy Homes Renovation Tax Credit Act, 2012.

 

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 2 and does not form part of the law.  Bill 2 has been enacted as Chapter 13 of the Statutes of Ontario, 2012.

The Bill amends the Taxation Act, 2007 to implement a healthy homes renovation tax credit.  The tax credit is set out in new section 103.1.1 of the Act.  It is a refundable tax credit.

An individual may claim the tax credit for a taxation year if the individual is at least 65 years of age at the end of the taxation year and if he or she occupies a qualifying principal residence at any time in the taxation year or reasonably expects to occupy a qualifying principal residence within 24 months after the end of the taxation year.  An individual may also claim the credit for a taxation year if the individual shares a principal residence at any time in the taxation year with a qualifying relation who is a senior or reasonably expects to share a principal residence with the senior within 24 months after the end of the taxation year.  Specific rules apply in circumstances where an individual dies or becomes bankrupt.

The tax credit for a taxation year is generally determined with reference to qualifying expenditures paid by or on behalf of an individual in a taxation year for listed improvements to a qualifying principal residence of the individual.  For 2012, however, the tax credit is determined with reference to qualifying expenditures paid by or on behalf of an individual after September 30, 2011 and before January 1, 2013.  Listed improvements are those described in subsection 103.1.1 (8) of the Act.

An eligible individual's tax credit for a taxation year is 15 per cent of the lesser of $10,000 and the amount by which the individual's qualifying expenditures exceed certain government assistance.  The $10,000 limit will also apply to claims by different individuals in respect of the same shared principal residence in a taxation year and to claims by an individual and his or her spouse or common-law partner in respect of one or more principal residences in a taxation year.

An individual who wishes to claim the tax credit may contact the Minister of Finance for information about the tax credit, including the information specified in subsection 103.1.1 (4) of the Act.

The Minister of Finance shall ensure that the appropriate annual financial reports compare the anticipated cost of the credit for a year against the actual cost of the credit for the year.

[40] Bill 2 As Amended by Standing Committee (PDF)

Bill 2 2012

An Act to amend the Taxation Act, 2007 to implement a healthy homes renovation tax credit

Note: This Act amends the Taxation Act, 2007.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 84 (1) of the Taxation Act, 2007 is amended by adding the following paragraph:

  16.  A healthy homes renovation tax credit under section 103.1.1.

   (2)  Subsection 84 (2.1) of the Act is amended by adding the following paragraph:

    3.  The tax credit referred to in paragraph 16 of subsection (1), with respect to taxation years ending after December 31, 2011.

   (3)  Subsection 84 (3) of the Act is amended by striking out "paragraphs 1, 2, 3, 12, 12.1, 13, 14 and 15" in the portion before clause (a) and substituting "paragraphs 1, 2, 3, 12, 12.1, 13, 14, 15 and 16".

   2.  Part IV of the Act is amended by adding the following section:

Healthy homes renovation tax credit

   103.1.1  (1)  An individual, other than a trust, who is resident in Ontario on the last day of a taxation year ending after December 31, 2011 may claim an amount in respect of and not exceeding the amount of his or her healthy homes renovation tax credit.

Determination of tax credit

   (2)  The amount of the tax credit under this section for a taxation year ending after December 31, 2012 is determined with reference to qualifying expenditures made or incurred during the taxation year for listed improvements to a qualifying principal residence. 

Same, 2012 taxation year

   (3)  The amount of the tax credit under this section for a taxation year ending before January 1, 2013 is determined with reference to qualifying expenditures made or incurred after September 30, 2011 and before January 1, 2013 for listed improvements to a qualifying principal residence.

Information concerning tax credit

   (3.1)  An individual who wishes to claim the healthy homes renovation tax credit may contact the Ministry of Finance to obtain information concerning the tax credit, including the following:

    1.  A list of appropriate organizations that may be able to provide any of the following:

            i.  General advice about qualifying for the tax credit.

           ii.  Review of quotes from contractors to ensure that the quotes are reasonable.

          iii.  A list of experienced contractors who have successfully worked on projects that have qualified for the tax credit or any similar tax credits.

    2.  Any other information that may assist the individual in determining whether he or she may qualify for the tax credit.

Amount of tax credit

   (4)  The amount of an individual's tax credit under this section for a taxation year is equal to the amount calculated using the formula,

A  B

in which,

  "A"  is 15 per cent, and

  "B"  is the lesser of $10,000 and the amount by which "C" exceeds "D", where,

         "C"  is,

                 (a)  for a taxation year ending before January 1, 2013, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual after September 30, 2011 and before January 1, 2013 and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

                 (b)  for a taxation year ending after December 31, 2012, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual during the taxation year and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

         "D"  is the total of all amounts each of which is received or receivable by any person, or that can reasonably be expected to be received by any person, in respect of a qualifying expenditure of the individual referred to in "C" and that is,

                 (a)  provided under any program that is designed to provide assistance with the cost of the construction, alteration or renovation of a residence or land on which the residence is situated and that is financed by a municipal, provincial or federal government,

                 (b)  provided as a forgivable loan from a municipal, provincial or federal government and that is designed to provide permanent or temporary assistance with, or financing for, the cost of the construction, alteration or renovation of a residence or land on which the residence is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

                  (c)  provided under any program that is prescribed by the Minister of Finance for the purposes of this subsection.

Eligible individuals

   (5)  An individual is eligible to claim a tax credit under this section for a taxation year if the individual is described in any of the following paragraphs:

    1.  The individual is a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

    2.  The individual is a qualifying relation of a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

Qualifying principal residence

   (6)  A qualifying principal residence of an individual for the purposes of this section for a taxation year is a residence located in Ontario,

  (a)  that is, if the individual is a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year or a residence that is reasonably expected to become the principal residence of the individual within 24 months after the end of the taxation year; or

  (b)  that is, if the individual is not a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year and that is, at the same time, also the principal residence of a qualifying relation of the individual who is a senior at the end of the taxation year, or a residence that is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year.

Listed improvements

   (7)  The following are listed improvements for the purposes of this section:

    1.  An improvement,

            i.  that is part of a renovation or alteration of a residence or of the land on which the residence is situated, or that is part of the construction of the residence, that can reasonably be considered to be undertaken,

                  A.  to enable a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) to gain access to, or to be mobile or functional within, the residence or the land, or

                  B.  to reduce the risk of harm to a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) within the residence or the land, or in gaining access to the residence or the land,

           ii.  that,

                  A.  is of an enduring nature and that is integral to the residence or the land, or

                  B.  relates to the purchase and installation of a modular or removable version of an item of a type that can otherwise be installed as a permanent fixture to the residence or land on which it is situated (such as modular ramps and non-fixed bath lifts),

          iii.  whose primary purpose is not to increase the value of the residence or the land, and

          iv.  that would ordinarily be undertaken by, or on behalf of, a person who has an impairment to enable him or her to gain access to, or to be mobile or functional within, his or her residence or land.

    2.  An improvement that is prescribed by the Minister of Finance for the purposes of this section.

Same, prescribed exclusions

   (8)  An improvement is not a listed improvement if it is prescribed by the Minister of Finance as ineligible for the purposes of this section.

Qualifying expenditures

   (9)  A qualifying expenditure is an outlay or expense made or incurred by, or on behalf of, an individual that is directly attributable to a listed improvement by the individual and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the listed improvement, but does not include such an outlay,

  (a)  to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation of the individual;

  (b)  made or incurred under the terms of an agreement entered into before October 1, 2011;

   (c)  to acquire a property that can be used independently of the listed improvement;

  (d)  that is the cost of annual, recurring or routine repair, maintenance or service;

  (e)  to acquire a household appliance;

    (f)  to acquire an electronic home-entertainment device;

  (g)  for financing costs in respect of the listed improvement;

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

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

Rules re qualifying expenditures

   (10)  The following rules apply with respect to qualifying expenditures for the purposes of this section:

    1.  Subject to paragraph 2, a qualifying expenditure is deemed to have been paid on the earlier of the date on which the expenditure was paid and the date it became payable.

    2.  If a qualifying expenditure in respect of a single listed improvement is paid by an individual in two or more instalments, the total of all instalments shall be deemed to have been paid on the earlier of the date on which the last instalment was paid and the date it became payable.

    3.  A qualifying expenditure that is paid or deemed to have been paid after September 30, 2011 and before January 1, 2012 shall be considered to have been paid on January 1, 2012.

    4.  A qualifying expenditure made by an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation 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 principal residence of the individual, to the extent of the individual's share of that outlay or expense,

            i.          if the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were the principal residence of that natural person, and

           ii.          if the corporation has notified the individual, in writing, of the individual's share of the outlay or expense.

    5.  A qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust in respect of a property owned by the trust that includes the principal residence of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the principal residence of the individual (including, for this purpose, common areas relevant to more than one principal residence),

            i.          if the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were the principal residence of that natural person, and

           ii.          if the trust has notified the individual, in writing, of the individual's share of the outlay or expense.

    6.  The following rules apply if more than one individual is entitled to claim a tax credit under this section for a taxation year in respect of a single residence that is the qualifying principal residence of all of the individuals at the same time during the taxation year or is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year:

            i.          The total amount of qualifying expenditures that may be claimed by all of the individuals in respect of the residence cannot exceed $10,000.

           ii.          If the total amount of qualifying expenditures claimed by all of the individuals in respect of the residence is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    7.  The following rules apply if an individual and any individual who is the individual's qualifying spouse or qualifying common-law partner on December 31 of a taxation year are both entitled to claim a tax credit under this section:

            i.  The total amount of qualifying expenditures that may be claimed by the two individuals for the taxation year cannot exceed $10,000.

           ii.  If the total amount of qualifying expenditures claimed by the two individuals for the taxation year is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    8.  An outlay or expense is not a qualifying expenditure unless the work to implement the listed improvement (to which that outlay or expense is directly attributable) begins within a reasonable time after the outlay or expense is made or incurred.

Part-year residents

   (11)  Subject to the following rules, an individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had been resident in Canada throughout that period.

    2.  For taxation years of the individual ending after December 31, 2012, the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

Bankruptcy

   (12)  Subject to the following rules, an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had not become bankrupt.

    2.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending in a calendar year after December 31, 2012 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of the calendar year if the individual had not become bankrupt.

Bankruptcy, senior

   (13)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is not a senior but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Same, qualifying relation

   (14)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Death in year

   (15)  If, when an individual dies, he or she is not a senior but would have become a senior by the end of the calendar year in which he or she dies, the individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (16)  If, when an individual dies, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year in which the death occurs, the deceased individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (17)  If an individual is a qualifying relation of another individual who, immediately before death, is not a senior but who would have become a senior by the end of the calendar year in which he or she dies, the individual who is the qualifying relation is eligible to claim a tax credit under this section for a taxation year that ends in the calendar year as if the other individual had not died.

Money appropriated by the Legislature

   (18)  The money required for the purposes of this section shall be paid out of the money appropriated for the purposes by the Legislature.

Financial disclosure

   (18.1)  The Minister of Finance shall ensure that the appropriate annual financial reports compare the anticipated cost of the credit for a year against the actual cost of the credit for the year.

Relation to other credits

   (19)  Despite paragraph 248 (28) (b) of the Federal Act as it applies for the purposes of this Act, an individual may include the same qualifying expenditure for the purpose of determining his or her tax credit under this section and for the purpose of determining his or her entitlement to the tax credit under subsection 9 (20) of this Act.

Definitions

   (20)  In this section,

"qualifying relation" of an individual means a person who is connected or related to the individual in any manner described in subsection 251 (6) or 252 (2) of the Federal Act; ("proche admissible")

"senior" means, despite subsection 98 (1), an individual who is at least 65 years of age. ("personne âgée")

Commencement

   3.  This Act comes into force on the day it receives Royal Assent.

Short title

   4.  The short title of this Act is the Healthy Homes Renovation Tax Credit Act, 2012.

 

This reprint of the Bill is marked to indicate the changes that were made in Committee.

The changes are indicated by underlines for new text and a strikethrough for deleted text.

 

______________

 

 

 

EXPLANATORY NOTE

The Bill amends the Taxation Act, 2007 to implement a healthy homes renovation tax credit.  The tax credit is set out in new section 103.1.1 of the Act.  It is a refundable tax credit.

An individual may claim the tax credit for a taxation year if the individual is at least 65 years of age at the end of the taxation year and if he or she occupies a qualifying principal residence at any time in the taxation year or reasonably expects to occupy a qualifying principal residence within 24 months after the end of the taxation year.  An individual may also claim the credit for a taxation year if the individual shares a principal residence at any time in the taxation year with a qualifying relation who is a senior or reasonably expects to share a principal residence with the senior within 24 months after the end of the taxation year.  Specific rules apply in circumstances where an individual dies or becomes bankrupt.

The tax credit for a taxation year is generally determined with reference to qualifying expenditures paid by or on behalf of an individual in a taxation year for listed improvements to a qualifying principal residence of the individual.  For 2012, however, the tax credit is determined with reference to qualifying expenditures paid by or on behalf of an individual after September 30, 2011 and before January 1, 2013.  Listed improvements are those described in subsection 103.1.1 (7) of the Act.

An eligible individual's tax credit for a taxation year is 15 per cent of the lesser of $10,000 and the amount by which the individual's qualifying expenditures exceed certain government assistance.  The $10,000 limit will also apply to claims by different individuals in respect of the same shared principal residence in a taxation year and to claims by an individual and his or her spouse or common-law partner in respect of one or more principal residences in a taxation year.

An individual who wishes to claim the tax credit may contact the Minister of Finance for information about the tax credit, including the information specified in subsection 103.1.1 (3.1) of the Act.

The Minister of Finance shall ensure that the appropriate annual financial reports compare the anticipated cost of the credit for a year against the actual cost of the credit for the year.

[40] Bill 2 Original (PDF)

Bill 2 2011

An Act to amend the Taxation Act, 2007 to implement a healthy homes renovation tax credit

Note: This Act amends the Taxation Act, 2007.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 84 (1) of the Taxation Act, 2007 is amended by adding the following paragraph:

  16.  A healthy homes renovation tax credit under section 103.1.1.

   (2)  Subsection 84 (2.1) of the Act is amended by adding the following paragraph:

    3.  The tax credit referred to in paragraph 16 of subsection (1), with respect to taxation years ending after December 31, 2011.

   (3)  Subsection 84 (3) of the Act is amended by striking out "paragraphs 1, 2, 3, 12, 12.1, 13, 14 and 15" in the portion before clause (a) and substituting "paragraphs 1, 2, 3, 12, 12.1, 13, 14, 15 and 16".

   2.  Part IV of the Act is amended by adding the following section:

Healthy homes renovation tax credit

   103.1.1  (1)  An individual, other than a trust, who is resident in Ontario on the last day of a taxation year ending after December 31, 2011 may claim an amount in respect of and not exceeding the amount of his or her healthy homes renovation tax credit.

Determination of tax credit

   (2)  The amount of the tax credit under this section for a taxation year ending after December 31, 2012 is determined with reference to qualifying expenditures made or incurred during the taxation year for listed improvements to a qualifying principal residence. 

Same, 2012 taxation year

   (3)  The amount of the tax credit under this section for a taxation year ending before January 1, 2013 is determined with reference to qualifying expenditures made or incurred after September 30, 2011 and before January 1, 2013 for listed improvements to a qualifying principal residence.

Amount of tax credit

   (4)  The amount of an individual's tax credit under this section for a taxation year is equal to the amount calculated using the formula,

A  B

in which,

  "A"  is 15 per cent, and

  "B"  is the lesser of $10,000 and the amount by which "C" exceeds "D", where,

         "C"  is,

                 (a)  for a taxation year ending before January 1, 2013, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual after September 30, 2011 and before January 1, 2013 and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

                 (b)  for a taxation year ending after December 31, 2012, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual during the taxation year and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

         "D"  is the total of all amounts each of which is received or receivable by any person, or that can reasonably be expected to be received by any person, in respect of a qualifying expenditure of the individual referred to in "C" and that is,

                 (a)  provided under any program that is designed to provide assistance with the cost of the construction, alteration or renovation of a residence or land on which the residence is situated and that is financed by a municipal, provincial or federal government,

                 (b)  provided as a forgivable loan from a municipal, provincial or federal government and that is designed to provide permanent or temporary assistance with, or financing for, the cost of the construction, alteration or renovation of a residence or land on which the residence is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

                  (c)  provided under any program that is prescribed by the Minister of Finance for the purposes of this subsection.

Eligible individuals

   (5)  An individual is eligible to claim a tax credit under this section for a taxation year if the individual is described in any of the following paragraphs:

    1.  The individual is a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

    2.  The individual is a qualifying relation of a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual's qualifying principal residence.

Qualifying principal residence

   (6)  A qualifying principal residence of an individual for the purposes of this section for a taxation year is a residence located in Ontario,

  (a)  that is, if the individual is a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year or a residence that is reasonably expected to become the principal residence of the individual within 24 months after the end of the taxation year; or

  (b)  that is, if the individual is not a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year and that is, at the same time, also the principal residence of a qualifying relation of the individual who is a senior at the end of the taxation year, or a residence that is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year.

Listed improvements

   (7)  The following are listed improvements for the purposes of this section:

    1.  An improvement,

            i.  that is part of a renovation or alteration of a residence or of the land on which the residence is situated, or that is part of the construction of the residence, that can reasonably be considered to be undertaken,

                  A.  to enable a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) to gain access to, or to be mobile or functional within, the residence or the land, or

                  B.  to reduce the risk of harm to a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) within the residence or the land, or in gaining access to the residence or the land,

           ii.  that,

                  A.  is of an enduring nature and that is integral to the residence or the land, or

                  B.  relates to the purchase and installation of a modular or removable version of an item of a type that can otherwise be installed as a permanent fixture to the residence or land on which it is situated (such as modular ramps and non-fixed bath lifts),

          iii.  whose primary purpose is not to increase the value of the residence or the land, and

          iv.  that would ordinarily be undertaken by, or on behalf of, a person who has an impairment to enable him or her to gain access to, or to be mobile or functional within, his or her residence or land.

    2.  An improvement that is prescribed by the Minister of Finance for the purposes of this section.

Same, prescribed exclusions

   (8)  An improvement is not a listed improvement if it is prescribed by the Minister of Finance as ineligible for the purposes of this section.

Qualifying expenditures

   (9)  A qualifying expenditure is an outlay or expense made or incurred by, or on behalf of, an individual that is directly attributable to a listed improvement by the individual and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the listed improvement, but does not include such an outlay,

  (a)  to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation of the individual;

  (b)  made or incurred under the terms of an agreement entered into before October 1, 2011;

   (c)  to acquire a property that can be used independently of the listed improvement;

  (d)  that is the cost of annual, recurring or routine repair, maintenance or service;

  (e)  to acquire a household appliance;

    (f)  to acquire an electronic home-entertainment device;

  (g)  for financing costs in respect of the listed improvement;

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

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

Rules re qualifying expenditures

   (10)  The following rules apply with respect to qualifying expenditures for the purposes of this section:

    1.  Subject to paragraph 2, a qualifying expenditure is deemed to have been paid on the earlier of the date on which the expenditure was paid and the date it became payable.

    2.  If a qualifying expenditure in respect of a single listed improvement is paid by an individual in two or more instalments, the total of all instalments shall be deemed to have been paid on the earlier of the date on which the last instalment was paid and the date it became payable.

    3.  A qualifying expenditure that is paid or deemed to have been paid after September 30, 2011 and before January 1, 2012 shall be considered to have been paid on January 1, 2012.

    4.  A qualifying expenditure made by an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation 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 principal residence of the individual, to the extent of the individual's share of that outlay or expense,

            i.          if the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were the principal residence of that natural person, and

           ii.          if the corporation has notified the individual, in writing, of the individual's share of the outlay or expense.

    5.  A qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust in respect of a property owned by the trust that includes the principal residence of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the principal residence of the individual (including, for this purpose, common areas relevant to more than one principal residence),

            i.          if the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were the principal residence of that natural person, and

           ii.          if the trust has notified the individual, in writing, of the individual's share of the outlay or expense.

    6.  The following rules apply if more than one individual is entitled to claim a tax credit under this section for a taxation year in respect of a single residence that is the qualifying principal residence of all of the individuals at the same time during the taxation year or is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year:

            i.          The total amount of qualifying expenditures that may be claimed by all of the individuals in respect of the residence cannot exceed $10,000.

           ii.          If the total amount of qualifying expenditures claimed by all of the individuals in respect of the residence is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    7.  The following rules apply if an individual and any individual who is the individual's qualifying spouse or qualifying common-law partner on December 31 of a taxation year are both entitled to claim a tax credit under this section:

            i.  The total amount of qualifying expenditures that may be claimed by the two individuals for the taxation year cannot exceed $10,000.

           ii.  If the total amount of qualifying expenditures claimed by the two individuals for the taxation year is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual's tax credit under this section.

    8.  An outlay or expense is not a qualifying expenditure unless the work to implement the listed improvement (to which that outlay or expense is directly attributable) begins within a reasonable time after the outlay or expense is made or incurred.

Part-year residents

   (11)  Subject to the following rules, an individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had been resident in Canada throughout that period.

    2.  For taxation years of the individual ending after December 31, 2012, the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

Bankruptcy

   (12)  Subject to the following rules, an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year:

    1.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had not become bankrupt.

    2.  The sum of all amounts that may be claimed under this section for all taxation years of the individual ending in a calendar year after December 31, 2012 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of the calendar year if the individual had not become bankrupt.

Bankruptcy, senior

   (13)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is not a senior but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Same, qualifying relation

   (14)  If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

Death in year

   (15)  If, when an individual dies, he or she is not a senior but would have become a senior by the end of the calendar year in which he or she dies, the individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (16)  If, when an individual dies, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year in which the death occurs, the deceased individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

Same

   (17)  If an individual is a qualifying relation of another individual who, immediately before death, is not a senior but who would have become a senior by the end of the calendar year in which he or she dies, the individual who is the qualifying relation is eligible to claim a tax credit under this section for a taxation year that ends in the calendar year as if the other individual had not died.

Money appropriated by the Legislature

   (18)  The money required for the purposes of this section shall be paid out of the money appropriated for the purposes by the Legislature.

Relation to other credits

   (19)  Despite paragraph 248 (28) (b) of the Federal Act as it applies for the purposes of this Act, an individual may include the same qualifying expenditure for the purpose of determining his or her tax credit under this section and for the purpose of determining his or her entitlement to the tax credit under subsection 9 (20) of this Act.

Definitions

   (20)  In this section,

"qualifying relation" of an individual means a person who is connected or related to the individual in any manner described in subsection 251 (6) or 252 (2) of the Federal Act; ("proche admissible")

"senior" means, despite subsection 98 (1), an individual who is at least 65 years of age. ("personne âgée")

Commencement

   3.  This Act comes into force on the day it receives Royal Assent.

Short title

   4.  The short title of this Act is the Healthy Homes Renovation Tax Credit Act, 2011.

 

EXPLANATORY NOTE

The Bill amends the Taxation Act, 2007 to implement a healthy homes renovation tax credit.  The tax credit is set out in new section 103.1.1 of the Act.  It is a refundable tax credit.

An individual may claim the tax credit for a taxation year if the individual is at least 65 years of age at the end of the taxation year and if he or she occupies a qualifying principal residence at any time in the taxation year or reasonably expects to occupy a qualifying principal residence within 24 months after the end of the taxation year.  An individual may also claim the credit for a taxation year if the individual shares a principal residence at any time in the taxation year with a qualifying relation who is a senior or reasonably expects to share a principal residence with the senior within 24 months after the end of the taxation year.  Specific rules apply in circumstances where an individual dies or becomes bankrupt.

The tax credit for a taxation year is generally determined with reference to qualifying expenditures paid by or on behalf of an individual in a taxation year for listed improvements to a qualifying principal residence of the individual.  For 2012, however, the tax credit is determined with reference to qualifying expenditures paid by or on behalf of an individual after September 30, 2011 and before January 1, 2013.  Listed improvements are those described in subsection 103.1.1 (7) of the Act.

An eligible individual's tax credit for a taxation year is 15 per cent of the lesser of $10,000 and the amount by which the individual's qualifying expenditures exceed certain government assistance.  The $10,000 limit will also apply to claims by different individuals in respect of the same shared principal residence in a taxation year and to claims by an individual and his or her spouse or common-law partner in respect of one or more principal residences in a taxation year.