Multigenerational Home Renovation Tax Credit

Aging at home is becoming the top choice for many Canadian seniors, and the federal government now offers a powerful new tax credit to help families make that possible. The Multigenerational Home Renovation Tax Credit (MHRTC) can return up to $7,500 to families who build a secondary suite for a senior or an adult with a disability.

This guide explains what the credit is, who qualifies, what renovations count, how to apply, and how to maximize your refund.

What Is the Multigenerational Home Renovation Tax Credit?

The MHRTC is a refundable federal tax credit that helps families create a self‑contained secondary unit so a senior (65+) or a person eligible for the Disability Tax Credit can live with a qualifying relative.

Because it is refundable, you receive the money even if you owe no taxes.

Key Facts (2026)

• Refundable credit — CRA pays you even with zero tax owing
• 14% credit rate (2026 onward)
• Up to $50,000 in eligible renovation expenses
• Maximum refund: $7,000
• Claimed on line 45355 of your tax return
• Renovation must create a fully separate, self‑contained suite

Who Qualifies

You qualify if the renovation is for a:

1. Senior aged 65 or older, or

2. Adult eligible for the Disability Tax Credit (DTC)

The senior or DTC‑eligible adult must move into the new suite within 12 months of the renovation being completed.

A qualifying relative (child, grandchild, parent, sibling, aunt, uncle, niece, nephew) must own the home.

What Renovations Are Eligible

To qualify, the renovation must create a new, separate dwelling unit with:

• A private entrance
• A kitchen or kitchenette
• A bathroom
• A sleeping area

Examples of Eligible Renovations

• Building a basement suite
• Adding a garden suite or backyard cottage
• Converting a garage into a legal secondary unit
• Framing, drywall, electrical, plumbing
• HVAC, insulation, windows, doors
• Architectural and engineering plans
• Building permits and inspection fees

NOT Eligible

• Regular home repairs
• Furniture or appliances
• Landscaping
• Cosmetic upgrades
• Adding a bedroom or bathroom to shared space (must be separate)

How Much You Can Get Back

The credit equals:

14% × eligible expenses (up to $50,000) → Maximum refund: $7,000

Examples

• $50,000 renovation → $7,000 refund
• $30,000 renovation → $4,200 refund
• $15,000 renovation → $2,100 refund

How to Apply (Step‑by‑Step)

1. Plan the renovation

Ensure the project will create a self‑contained suite that meets building codes.

2. Keep all receipts and contracts

CRA requires detailed invoices showing:

• Contractor name and GST/HST number
• Work performed
• Materials used
• Dates and amounts paid

3. Ensure the senior or DTC‑eligible adult will live in the suite

They must move in within 12 months of completion.

4. Claim the credit on your tax return

• Use line 45355
• Enter total eligible expenses (up to $50,000)
• CRA automatically calculates the refund

5. Keep documentation for 6 years

CRA may request proof.

Where to Apply

You do not apply through a separate program. You claim the credit directly on your annual tax return.

You will need:

• Receipts
• Contracts
• Proof of relationship
• Proof the senior or DTC‑eligible adult lives in the new suite

If you use tax software, search for “Multigenerational Home Renovation Tax Credit” or line 45355.

Why This Credit Matters for Seniors

This credit is designed to support aging in place, allowing seniors to live close to family while maintaining privacy and independence.

Benefits include:

• Lower long‑term care costs
• Safer living environment
• Family support nearby
• Increased home value
• Reduced isolation

Real‑Life Example

A family in BC builds a basement suite for their 72‑year‑old mother.

• Total cost: $48,000
• Eligible amount: $48,000
• Refund: 14% × $48,000 = $6,720

They receive the refund even though the mother has no taxable income.

Should Seniors Use This Credit?

Yes — if a family is planning to live together, this is one of the most generous federal credits available. It pairs well with:

• Home Accessibility Tax Credit (HATC)
• BC RAHA program
• GST/HST New Housing Rebate (in some cases)

Official Government Benefits Page

Government of Canada — Benefits for Seniors

Seniors Canada Info Main Health and Safety Hub