Multigenerational Home Renovation Tax Credit – Renovate a secondary unit for a family member, Check Eligibility & Process

Written byPraveen Singh

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Multigenerational Home Renovation Tax Credit: The government of Canada has introduced a new Multigenerational Home Renovation Tax Credit to eligible beneficiaries. It is a refundable tax credit which can be claimed by beneficiaries on the 2023 Income Tax and Benefit Return. Eligible beneficiaries can claim the credit for certain renovation expenses.

MHRTC Benefits have been offered to beneficiaries to help them build a self-contained secondary unit. This secondary united will allow adults or seniors who are fulfilling eligibility conditions for the disability tax credit to live peacefully with qualifying relatives.

Multigenerational Home Renovation Tax Credit

Under the Multigenerational Home Renovation Tax Credit, beneficiaries can claim up to $50,000. The MHRTC tax credit is 15% of your costs, up to a maximum of $7,500, for each claim beneficiaries are eligible to make. The tax credit can be claimed only once.

Beneficiaries can apply for the credit while filling out tax return files. The tax credit is available starting on 2023 tax returns. Scroll down the page and learn more information regarding the Multigenerational Home Renovation $50,000 Tax Credit such as the eligibility criteria, credit amount and others.

Multigenerational Home Renovation Tax Credit - Renovate a secondary unit for a family member, Check Eligibility & Process

Eligibility Criteria To Get Benefits of MHRTC

The following section includes information related to the eligibility criteria that need to be fulfilled to get benefits of the Multigenerational Home Renovation Tax Credit. The following are the required conditions to become eligible:

  • Individuals must have sufficient renovation costs to build a secondary unit within the dwelling or on the property.
  • The renovation must be completed in the tax year that the beneficiaries are filing the claim, regardless of when the renovation was commenced.
  • Any of the individuals living in the existing dwelling or the new secondary unit must be fulfilling a qualifying individual eligibility. A qualifying individual fulfils any one of the following conditions:
    • They must be 65 years old or older at the end of the renovation period tax year.
    • They must be 18 to 64 years old and eligible for the disability tax credit.
  • This is the only claim of MHRTC for the qualifying beneficiary. Please note that only a single renovation can be claimed for a qualifying beneficiary during their lifetime.
  • Beneficiaries claiming the credit should be eligible individuals. Eligible individuals are residents of Canada between 1st January to 31st December of the year they are claiming who either:
    • They must ordinarily reside, or intend to ordinarily reside, in the eligible dwelling within a year of the end of the renovation period of a qualifying renovation and is one of the following:
      • Must be qualifying individuals.
      • The cohabitating spouse or common-law partner of qualifying individuals/
      • A qualifying relation of qualifying individuals
    • They must own the eligible dwelling or be the beneficiary of a trust that owns the eligible dwelling. There must be a qualifying relation of qualifying individuals.
  • The eligible renovated dwelling is all of the following:
    • Situated in Canada
    • Owned by qualifying individuals or a qualifying relation of those individuals during the renovation period tax year.
    • Ordinarily inhabited by qualifying individuals and a qualifying relation of individuals within a year after the completion of the renovation period.

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Multigenerational Home Renovation Tax Credit Amount

Individuals can claim up to $50,000 in the qualifying cost for a single qualifying renovation that was completed in the respective tax year. Once, the costs of renovation are shared, more eligible applicants can claim for the same renovation up to a combined total of $50,000. The Multigenerational Home Renovation Tax Credit amount is 15% of whichever amount is less:

  • $50,000: If the cost of renovation were more than $50,000, the maximum amount beneficiaries can claim is $50,000.
  • The amount of qualifying expenditures incurred by eligible individuals: Beneficiaries can claim the total of the qualifying expenditures up to $50,000.

Multigenerational Home Renovation $50,000 Tax Credit Eligible Expenses

The expenses of renovation that can be claimed should be qualifying expenditures. Below are the qualifying expenditures:

  • Rational expense that is accountable to the qualifying renovation directly of an eligible dwelling
  • Must have been made after 31st December 2022 and before the completion of the renovation time.
  • Must have been by eligible individuals (or a trust that eligible individuals are beneficiaries of)

Qualifying expenditures may include:

  • Received goods and services including the work performed by professionals like carpenters, plumbers, etc.
  • Expenses for permits required
  • Equipment rental fee used in the course of the qualifying renovation

Frequently Asked Questions

How to claim the Multigenerational Home Renovation Tax Credit?
Beneficiaries will just have to file their tax return and MHRTC claim will be available on line 45355 of the income tax and benefit return. Schedule 12 will be used to report the expenses related to the MHRTC and calculate the total credit one can claim.

When can beneficiaries claim the Multigenerational Home Renovation Tax Credit?
Beneficiaries can claim the Multigenerational Home Renovation Tax Credit to claim the qualifying renovation in the tax year after the completion of the renovation period, even if the renovation takes more than a year.

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