Tax Credit for Home Security Systems

Summary#

This bill creates a federal non-refundable tax credit for home security costs. It lets individuals claim part of what they spend on a security system for their home and attached structures. It applies starting with the 2020 tax year (Bill, new s. 118.07; applicability clause).

• Creates a Home Security Tax Credit equal to the “appropriate percentage” of eligible costs, capped at $5,000 of expenses per year (new s. 118.07(2)).
• “Appropriate percentage” is the lowest federal personal income tax rate (15% in recent years) (Income Tax Act, s. 248(1)).
• Eligible costs are for buying, installing, maintaining, and monitoring a security system installed in the individual’s eligible home (new s. 118.07(1)-(2)).
• “Eligible home” includes a self-contained dwelling and separate structures like a garage or barn (new s. 118.07(1)).
• If more than one person claims for the same home, their combined claim cannot exceed the per-home maximum; the Minister may set shares if they cannot agree (new s. 118.07(3)).
• The credit is ordered among other non-refundable credits in s. 118.92 (ordering rule; applies from 2020).

What it means for you#

• Households

  • You can claim a federal credit for part of what you spend on a security system for your home, including purchase, installation, maintenance, and monitoring, for the year you incur the expense (new s. 118.07(1)-(2)).
  • The credit reduces your federal tax owing; it is non-refundable. If you owe no federal tax, you receive no payment (new s. 118.07(2)).
  • The maximum base you can claim is $5,000 of eligible expenses per year. At a 15% credit rate, the maximum tax reduction is $750 per year (new s. 118.07(2); ITA s. 248(1)).
  • The bill does not require you to own the home. It applies to an individual’s “eligible home,” defined as a self-contained domestic establishment (new s. 118.07(1)).
  • Separate buildings on the property, like a garage or barn, are included if the security system is installed for the eligible home (new s. 118.07(1)).

• Multi-person households

  • If more than one person is entitled to claim for the same home, the total claimed for that home cannot exceed one person’s maximum. If you cannot agree on how to split it, the Minister may set the portions (new s. 118.07(3)).

• People with multiple homes

  • Your annual cap is $5,000 of eligible expenses per individual per year. The bill does not add a separate per-home cap beyond the shared-home rule (new s. 118.07(2)-(3)).

• Timing

  • Applies to the 2020 and later tax years (applicability clause).

Expenses#

Estimated net cost: Data unavailable.

• No official fiscal note was identified. Data unavailable.
• Structure of benefit: Non-refundable tax credit equal to the lowest federal tax rate applied to eligible expenses, capped at $5,000 of expenses per individual per year (new s. 118.07(2); ITA s. 248(1)).
• This is a tax expenditure (reduction in federal income tax revenues). No direct appropriation. Data unavailable.

Proponents' View#

• Encourages households to invest in security systems by lowering after-tax cost up to $750 per year per individual (new s. 118.07(2); ITA s. 248(1)).
• Addresses concerns about property crime, including in rural areas, as noted in the bill’s preamble referencing a House committee report (Preamble).
• Includes outbuildings like garages and barns, which can be important for rural and farm properties (new s. 118.07(1)).
• Uses an existing non-refundable credit format and integrates into the standard ordering of credits, which simplifies administration within current tax systems (s. 118.92).
• Sets clear sharing rules for multi-person households to avoid double-claiming on the same home, with ministerial authority to resolve disputes (new s. 118.07(3)).

Opponents' View#

• Non-refundable design provides no benefit to people with little or no federal tax payable, limiting help for lower-income households (new s. 118.07(2)).
• The bill is national and not targeted to rural areas, despite the rural-crime rationale in the preamble; benefits may go to households in low-crime areas as well (Preamble; new s. 118.07).
• “Security system” is not defined beyond being installed in the home; ambiguity could lead to disputes over eligible products and higher compliance and administration costs (new s. 118.07(1)).
• No cap per home beyond the shared-claim rule and no limit to one home per individual; higher-income individuals with multiple properties could benefit within the per-individual cap (new s. 118.07(2)-(3)).
• Creates an ongoing tax expenditure without a stated sunset, reporting, or evaluation requirement; total fiscal impact is unknown (applicability clause; Data unavailable).