Get up to $7,520 back with Canada’s Multigenerational Home Renovation Tax Credit. Learn eligibility, requirements, and how to claim this refundable tax credit.
Living with multiple generations under one roof has become increasingly common across Canada. Whether you’re caring for aging parents or supporting adult children with disabilities, creating a suitable living space often requires significant home renovations. The good news is that the Canadian government recognizes these challenges and offers financial support through the Multigenerational Home Renovation Tax Credit (MHRTC).
What Is the Multigenerational Home Renovation Tax Credit?
The MHRTC is a refundable tax credit introduced in 2023 to help Canadian families offset the costs of creating secondary living units within their homes. This credit specifically targets renovations that accommodate seniors aged 65 or older, or adults with disabilities who qualify for the disability tax credit.
The beauty of this program lies in its substantial financial benefit. Eligible families can claim 15% of their qualifying renovation expenses, up to a maximum of $50,000 in costs. This translates to a potential tax credit of up to $7,500 per qualifying renovation – money that goes directly back into your pocket, regardless of whether you owe taxes.
Who Benefits from This Tax Credit?
Qualifying Individuals
The secondary unit you create must house a qualifying individual, which includes:
- Senior family members who are 65 years of age or older by the end of the tax year when you claim the credit
- Adults aged 18 to 64 who are eligible for the disability tax credit at any time during the renovation period
Eligible Claimants
You can claim the MHRTC if you’re a Canadian resident who:
- Owns the eligible dwelling or are a beneficiary of a trust that owns it
- Are a qualifying relation to the person who will live in the secondary unit
- Intend to reside in the dwelling within 12 months of the renovation’s completion
Qualifying relations include spouses, common-law partners, parents, grandparents, children, grandchildren, siblings, aunts, uncles, nieces, and nephews.
Essential Requirements for Your Secondary Unit
Creating any additional living space won’t qualify for the tax credit. Your secondary unit must meet specific criteria to be considered self-contained:
Mandatory Features
The renovated space must include:
- Separate entrance (independent access from outside)
- Private bedroom or sleeping area
- Full bathroom with toilet, sink, and bathing facilities
- Complete kitchen with cooking facilities
Compliance Standards
Your renovation must:
- Meet all local building codes, permits, and bylaws
- Be newly constructed or created from existing space that didn’t previously qualify as a secondary unit
- Be completed within the tax year you’re making the claim
| Requirement Category | Specific Details |
|---|---|
| Physical Structure | Separate entrance, bedroom, bathroom, kitchen |
| Legal Compliance | Local permits, building codes, bylaws |
| Timing | Renovation completed in claim year |
| Residency | Qualifying person moves in within 12 months |
| Financial Limit | Maximum $50,000 in qualifying expenses |
| Credit Rate | 15% of qualifying expenses |
| Maximum Benefit | $7,500 per renovation |
| Lifetime Restriction | One claim per qualifying individual |
Understanding Qualifying Expenses
What You Can Include
The MHRTC covers a wide range of renovation costs, including:
- Building materials and supplies
- Professional contractor services
- Electrical and plumbing work
- Permits and inspection fees
- Equipment rentals for renovation work
- Labor costs (excluding your own work)
What’s Not Eligible
Certain expenses cannot be claimed:
- Household appliances and furniture
- Routine maintenance and repairs
- Landscaping and outdoor work
- Security systems and monitoring
- Your own labor and tools
- Expenses reimbursed by insurance or other programs
How to Claim Your Tax Credit
Timing Matters
You must claim the MHRTC in the same tax year that your renovation is completed, regardless of when you started the project. If your renovation begins in 2024 but finishes in 2025, you’d claim the credit on your 2025 tax return.
Filing Process
The tax credit is claimed on line 45355 of your income tax and benefit return using Schedule 12. You can claim multiple qualifying renovations in the same year if they meet all eligibility requirements.
Sharing the Credit
When multiple family members contribute to renovation costs, the $50,000 maximum can be split between eligible individuals, provided:
- Each person claiming the credit is an eligible individual
- The total claimed doesn’t exceed $50,000
- Each person only claims expenses they actually incurred
Important Limitations and Considerations
One-Time Opportunity
The MHRTC allows only one renovation claim per qualifying individual during their lifetime. This means if you claim the credit for your parent, no other family member can later claim it for the same person.
Residency Requirements
Both you and the qualifying individual must be Canadian residents throughout the entire tax year when you make the claim.
Documentation Requirements
Keep detailed records of all expenses, including:
- Itemized receipts and invoices
- Contractor information and GST/HST numbers
- Proof of payment (credit card statements, cancelled checks)
- Permits and inspection certificates
- Before-and-after photos of the renovation
Real-Life Application Examples
Consider Maria, whose 75-year-old father needs to move in with her family. She converts her basement into a self-contained secondary unit with its own entrance, bedroom, bathroom, and kitchenette. The total renovation costs $40,000. Maria can claim 15% of this amount, receiving a $6,000 tax credit on her return.
Alternatively, if David spends $60,000 renovating space for his adult son with disabilities, he can only claim the maximum $50,000, resulting in a $7,500 tax credit.
Frequently Asked Questions
Q: Can I claim the MHRTC if the qualifying person doesn’t move in immediately?
A: Yes, as long as they intend to occupy the secondary unit within 12 months of the renovation’s completion.
Q: What if my renovation costs exceed $50,000?
A: You can only claim the maximum $50,000 in qualifying expenses, resulting in a maximum $7,500 tax credit.
Q: Can I claim this credit for renovating a separate building on my property?
A: Yes, as long as the separate building meets all requirements for a self-contained secondary unit and complies with local bylaws.
The Multigenerational Home Renovation Tax Credit represents a significant opportunity for Canadian families to receive financial support while creating better living arrangements for multiple generations. By understanding the requirements and planning accordingly, you can maximize this benefit while building a home that truly works for your entire family.
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