Understanding the Multi-Generational Home Renovation Tax Credit
Building a secondary suite for a senior or disabled family member? You could claim up to $50,000 in qualifying expenditures.
Understanding the Multi-Generational Home Renovation Tax Credit (MHRTC)
For families looking to live together and support one another, the Canadian government introduced the MHRTC. This refundable tax credit is designed to assist with the cost of renovating an eligible dwelling to establish a secondary unit.
What is it?
The credit allows you to claim up to $50,000 in qualifying expenditures for each qualifying renovation. The tax credit is 15% of your costs, meaning a maximum refund of $7,500.
Who is Eligible?
- Qualifying Individual: A senior (65+) or an adult eligible for the disability tax credit.
- Qualifying Relation: A parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew of the qualifying individual (or their spouse).
What Renovations Qualify?
The renovation must create a self-contained secondary unit (private entrance, kitchen, bathroom, sleeping area) within the home. Examples include:
- Basement suites
- Garden suites (laneway homes)
- Additions to the existing home
Ineligible Expenses
- Furniture or appliances
- Routine maintenance (cleaning, gardening)
- Tools or equipment rentals
Be sure to keep all contracts and invoices related to the construction. This credit can significantly offset the high cost of creating a multi-generational home.