Medical Expenses: Are Hardwood Floors Deductible?

An interesting decision was delivered last month in a Tax Court of Canada case (Marion Sotski v. The Queen (2013) TCC 286) in Edmonton regarding the deductibility of the cost of hardwood floors in the home of a person suffering from Parkinson’s disease.

Section 118(2) of the Income Tax Act (the Act) was the focus of the dispute. Marion Sotski’s husband suffers from Parkinson’s disease. In 2010, relying on advice from health care professionals regarding her husband’s increased risk of falling on their carpet and from a dealer of hardwood floors regarding the surfaces offered, she decided to install hardwood floors in their home.

Under section 118(2) of the Act, expenses are deductible for various medical treatments and equipment, or renovations etcetera if there is a medical reason and justification for the purchase. Specifically, subsection 118(2)(l.2) was being relied on by Mrs. Sotski in this appeal as it provides the deductibility of reasonable expenses relating to renovations to a home of a person who lacks normal physical development or has a severe and prolonged mobility impairment to enable them better access and functionality throughout their home.

The broad section does have a couple exceptions though, and they were the focal part of the disagreement. The Minister of National Revenue (the Minister) contended that at least one of the two applied. The exceptions are if the renovations:

(i) are not of a type that would typically be expected to increase the value of the dwelling, and

(ii) are of a type that would not normally be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment.

The Minister relied on a technical interpretation of the two conditions in the subsection above, pointing to Budget Papers and Technical Notes to suggest the intention of Parliament was to categorize the types of expenditures in general, including all hardwood flooring. Justice F.J. Pizzitelli refused to take such a stance, concluding:

Had she installed, say high-end solid mahogany instead of lower-end engineered flooring, one could question her motives and arrive at a reasonable conclusion that this would not only increase the value of his dwelling but also be of the type of higher-end material most taxpayers would no doubt be happy to have his fellow taxpayers fund. This was not the case here.

This was a fair and reasoned decision that is likely in line with the policy objectives of subsection 118(2).