The Ultimate Guide to the Multi-Generational Home Renovation Credit

Mark Virgil Lofranco • 26 November 2024

If you’re planning to renovate your home to create space for elderly family members or relatives with disabilities, the government’s new Multigenerational Home Renovation Tax Credit (MHRTC) is here to lend a hand. This tax credit helps cover the costs of renovating your home to include a secondary dwelling unit—a private living space for a qualifying family member.



Let’s break down how this credit works and how you can benefit from it.


What Are Multigenerational Homes?


Multigenerational homes consist of two or more generations of adults living under one roof. With rising housing costs and the increasing need for caregiving, more families are opting to live together, especially those with aging parents or relatives who need extra assistance. A secondary dwelling unit—complete with its own entrance, bedroom, kitchen, and bathroom—can make this living arrangement easier and more comfortable.


What Is the Multigenerational Home Renovation Tax Credit?


The MHRTC, introduced in the 2022 federal budget, is designed to help cover the cost of home renovations that create a secondary dwelling unit for a qualifying family member. You can claim 15% of your renovation costs (up to a maximum of $7,500) for expenses incurred on or after January 1, 2023.


Who Is Eligible for the Multigenerational Home Renovation Tax Credit?


To qualify for the MHRTC, you must be building a secondary dwelling unit for a qualifying family member, which includes:

  • A family member aged 65 or older by the end of the tax year.
  • A family member between 18 and 64 years old who qualifies for the Disability Tax Credit (DTC).
  • A spouse or common-law partner of the qualifying individual.
  • A parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew of the qualifying individual who is also at least 18 years old by year-end.


Each family member can only benefit from the MHRTC once, meaning you can’t claim multiple units for the same relative.


What Counts as an Eligible Renovation Expense?


Eligible renovation expenses include:


  • Building materials
  • Equipment rentals
  • Professional labor (e.g., electricians, plumbers, architects)
  • Permits


Ineligible expenses include:


  • Your own labor or tools
  • Outdoor maintenance or gardening
  • Household appliances
  • Security monitoring services
  • Expenses not supported by receipts


Are Home Renovations Tax Deductible in Canada?


Yes, some home renovations are tax-deductible in Canada, particularly for seniors and people with disabilities. These deductions can be claimed on your annual tax return if the renovations are intended to improve safety and accessibility in their primary residence.


While both federal and provincial tax credits are available for home renovations in some provinces, the MHRTC is strictly a federal tax credit.


Provincial Home Renovation Tax Credits


British Columbia (BC) offers a similar home renovation tax credit for residents who live with a senior family member. You can claim up to $10,000 in eligible expenses, for a maximum credit of $1,000 per calendar year. To qualify, you must:


  • Be a senior or live with a senior family member.
  • Be a resident of BC at the end of the previous tax year.
  • Claim the federal government’s Disability Tax Credit (DTC).
  • Make renovations that improve mobility or reduce injury risk (e.g., installing handrails, widening doorways).


How to Claim the Multigenerational Home Renovation Tax Credit


Seniors, people with disabilities, and their caregivers may be eligible to claim the MHRTC for the 2023 tax year. You must claim the credit on line 45355 of your T1 General Tax Form during the year the renovations are completed.

Be sure to keep all invoices and receipts for your renovations, and ensure they include:


  • A description of the goods and services purchased or work performed.
  • Vendor names, business addresses, and GST/HST numbers.
  • Dates of purchase, delivery, and completion.


Ready to Make Space for Family? Claim Your Credits!


Turning your home into a multigenerational living space can be costly, but with the Multigenerational Home Renovation Tax Credit, you can claim up to $7,500 to help with those expenses. Now that you know the details, you’re all set to include this credit on your next tax return!


By planning ahead and taking advantage of the MHRTC, you can create a comfortable living space for your family members while saving on your renovation costs.


Key Takeaways


  • The Multigenerational Home Renovation Tax Credit (MHRTC) provides up to $7,500 to help offset renovation costs starting in 2023.
  • The tax credit covers expenses related to building a secondary dwelling unit for eligible family members.
  • You can claim 15% of your renovation costs for building a unit for a senior or a family member aged 18 to 64 who qualifies for the Disability Tax Credit.

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