Multigenerational Home Renovation Tax Credit: $7,500 Back for Secondary Suites

Key takeaways

• The Multigenerational Home Renovation Tax Credit (MHRTC) provides a 15% non-refundable credit on up to $50,000 in eligible renovation costs — maximum credit $7,500
• The renovation must create a self-contained secondary unit for a senior (65+) or a person with a disability
• The unit must have a private entrance, kitchen, bathroom, and sleeping area
• Only one MHRTC claim is allowed per qualifying individual over their lifetime
• Introduced effective January 1, 2023

The Multigenerational Home Renovation Tax Credit was introduced in the 2022 federal budget and applies to qualifying renovations completed on or after January 1, 2023. It targets families who want to create a secondary unit to allow an older parent or adult child with a disability to live with family while maintaining some independence.

Who qualifies

The renovation must be done on an eligible dwelling that an eligible person (a senior aged 65 or older, or a person eligible for the Disability Tax Credit) ordinarily inhabits or intends to ordinarily inhabit. The qualifying relation — a child, grandchild, parent, grandparent, spouse, common-law partner, sibling, aunt, uncle, niece, or nephew of the eligible person — must also ordinarily inhabit the home.

What counts as eligible expenses

Expenses must be incurred in connection with the renovation that creates the self-contained unit. This includes labour, materials, permits, architectural and design fees, and professional services directly related to the renovation. It does not include appliances, furniture, landscaping, or cleaning. The unit must have its own private entrance separate from the main unit, plus sleeping, kitchen, and bathroom facilities.

Claiming the credit

Claim the credit on Schedule 12 (Home Accessibility Expenses and MHRTC) of your T1 return. Keep all receipts in case the CRA requests documentation. The credit is non-refundable — it reduces federal income tax payable to zero but is not paid out as a refund. Multiple family members who share the renovation cost can split the claim, but the total across all claimants cannot exceed $50,000.