Multigenerational Home Renovation Tax Credit

The Federal government of Canada has introduced a new tax credit called the Multigenerational Home Renovation Tax Credit for homeowners who want to renovate their homes to accommodate multiple generations. This credit is aimed at those who are looking to create or expand a secondary suite, such as a basement apartment for a family member who is either a senior or an adult with a disability.

When does the tax credit come into effect?

The newly introduced home renovations tax credit came into effect January 1st 2023. The government hopes that this credit will help families afford the costs of renovating their homes to accommodate aging parents, adult children or other relatives. It also aims to help increase the supply of rental housing by encouraging homeowners to create suites that can be rented out. This credit is available to homeowners across Canada.

How much can I save?

The new tax credit will give eligible home owners a 15% tax refund on expenses of up to $50,000 for a maximum of $7,500 total.

How do I determine if I’m eligible?

To qualify for the tax credit, the secondary suite that is being created or expanded must be intended for a related adult over the age of 65 or a person living with a disability, including a grandparent, parent, child, grandchild, sibling, aunt, uncle, niece or nephew.

To be eligible, the secondary suite must be a self-contained housing unit with a separate entrance, bathroom, kitchen, and sleeping area. It is also important to note that the home being renovated must be or will be inhabited within 12 months after the completion of the renovations.

It’s worth mentioning that some expenses, such as the purchase of home appliances and costs for housekeeping or other services, do not qualify for the credit.