The Multi-Generational Home Renovation Tax Credit

The federal government has introduced a new tax credit that will make it easier for Canadians to care for relatives in their home.  The Multi-Generational Home Renovation Tax Credit came into effect January 1, 2023.  The new credit will cover expenses related to building a secondary suite for a family member who is either a senior or disabled.   This credit is set to cost the federal government $44 million over the next 5 years and is part of the affordable housing campaign that was promised by the liberal government in the last election.

What You Need to Know

Families will be able to claim a 15% tax credit on up to $50,000 of construction or renovation costs.  This will save Canadians up to $7500.   The requirements for the credit are:

  • The resident of the secondary unit must be a senior relative (65+) or an adult relative with a disability.  Adult children do not qualify.
  • The housing unit must be ordinarily habited or be expected to be ordinarily inhabited in the 12 months following the completion of construction.
  • The secondary suite must be self-contained.  This means a separate entrance, kitchen, bedroom, and bathroom.
  • The home may be owned by the senior or adult with a disability, a family member, or a trust.
  • A qualifying individual is only entitled to one tax credit in their lifetime.

Ongoing maintenance, appliances, repairs to an existing unit, and housekeeping are not eligible for the tax benefits.

The Bottom Line

Stats Canada reports that up to 6.4% of families live in a multi-generational household, with that number rapidly increasing each year.  This tax credit can help make caring for a relative a reality for Canadians.

Jim Thornton, CLU

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About the Author

Jim Thornton is a Financial Planner with Assante Capital Management Ltd. Please contact him at (519) 752-3155 to discuss your particular circumstances prior to acting on the information above.

Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

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