How to Take Advantage of the Multigenerational Home Renovation Tax Credit

Pulling off a home renovation that includes a secondary suite for an aging parent or disabled relative sounds great — until the bills start stacking up. The multigenerational home renovation tax credit exists exactly to ease that burden. If you plan carefully, you can claim up to 15% of eligible costs, reduce your taxes, and build more functional family living under one roof.

Here’s a real-world guide to who qualifies, what expenses count, and how to plan so you maximize your benefit with the multigenerational home renovation tax credit.

Who Qualifies: Are You Eligible?

To use the multigenerational home renovation tax credit (MHRTC), you must meet certain criteria. Skipping one of them can mean a claim rejection, so it’s worth checking carefully.

Here’s what you need:

• A qualifying individual: someone who is 65 or older by the end of the renovation tax year, or an adult eligible for the Disability Tax Credit.
  
• A qualifying relation: family ties like parent, grandparent, child, grandchild, aunt, uncle, niece, nephew (18+).
  
• The renovation must create a self-contained secondary unit in an eligible dwelling. That means a kitchen, bathroom, sleeping area, and private entrance. It can be built from scratch or converted from existing space that didn’t already meet secondary unit standards.
  
• The home must be owned (or jointly owned) by the qualifying individual or their qualifying relation and must be in Canada. You and the qualifying relation must live in or intend to live in the eligible dwelling within 12 months of renovation finishing.
  
• Only one qualifying renovation per qualifying individual is allowed in their lifetime.

Maximizing Your Claim with the Multigenerational Home Renovation Tax Credit

Not all renovation costs are eligible — knowing what is and isn’t will make a big difference when you add up everything for the tax credit.

Here’s what you can typically include:

Eligible Expenses	What’s NOT Eligible / Common Mistakes
Construction costs (walls, doors, renovation labour) tied to creating the secondary unit	Cosmetic upgrades, furniture, appliances in many cases (unless they’re integral to the secondary unit)
Permits, professional fees for architects or engineers where required by law	Costs reimbursed from other programs, or non-qualified subsidies
Features that improve accessibility in the secondary unit, e.g. ramps, accessible walk-in shower, grab bars, wider doorways (if needed)	Landscaping not required for access, pure decor or finishes beyond functional use

You can claim up to $50,000 in qualifying expenditures per qualifying renovation. The credit is 15% of those costs, so max credit = $7,500.

Planning Tips: How to Get It Right

Because the MHRTC has specific rules, good planning makes the difference between getting a full credit and missing out.

• Start with permits & codes. Ensure your secondary unit meets local by-laws and building codes before work starts so it qualifies.
  
• Plan your timeline. The renovation must finish in the tax year you’ll be claiming. If you finish after Dec 31, you can’t include those costs until the next year.
  
• Keep detailed records. Save all receipts, contracts, proof of payment, and photos showing before/after and that the secondary unit is self-contained.
  
• Know the occupancy plan. One of the people must be a qualifying individual, and they must live (or plan to live) in the unit or home within 12 months. If that’s not realistic, the claim may fail.
• Talk to a tax or renovation professional. They will help avoid missing eligibility or expense categories.

Common Mistakes & How to Avoid Them

These are traps people fall into — avoid them so you don’t lose part of your benefit:

• Not building a secondary unit with all required parts. A true secondary unit must include a kitchen, bathroom, sleeping area, and a private entrance. Converting just a bedroom or finishing a basement without adding those features doesn’t qualify under the MHRTC rules.
  
• Starting work in one tax year and finishing in the next. The CRA requires that the renovation be completed in the tax year you’re claiming it. If your project spills into the following year, you’ll have to wait until that year’s return to claim, and in some cases, partial claims get messy. Planning timelines with contractors is key here.
  
• Overlooking eligibility of the qualifying individual. The tax credit is tied to either someone aged 65+ or someone approved for the Disability Tax Credit. Families sometimes assume “elderly” means anyone retired or over 60, but the CRA is strict on this — the individual must meet one of those exact conditions.
  
• Trying to claim more than one qualifying renovation per person. Each qualifying individual only gets one renovation in their lifetime under this credit. If you add a suite for your parents this year, you can’t do another later and claim again for the same individual.

The Bottom Line & What to Do Next

Claiming the multigenerational home renovation tax credit can cover a meaningful chunk of cost when you’re adding a secondary suite or self-contained unit for family. The benefit maxes out at $7,500, but that number helps most when your renovation is planned well, eligible, and completed on time.

If you’re considering a renovation in Quebec, Ontario, B.C., or anywhere in Canada, maison d’etre will help you design that secondary unit to meet the MHRTC rules. Contact us to get a personalized plan, accurate cost estimate, and make sure your renovation is fully claimable under the multigenerational home renovation tax credit.