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Multigenerational home renovation tax credit: who can claim

Families who add a suite so a parent, grandparent or relative with a disability can live with them often miss the multigenerational home renovation tax credit, or claim it for the wrong year. The credit is refundable and has a precise definition of a secondary unit, a qualifying individual and eligible costs. This article walks through who can claim, what qualifies, how shared costs work, when to claim, and which records support the claim.

Sora Accounting & Tax · General information · Editorial policy
Updated · 5 min read

From a renovation plan to a refundable credit

Shows the steps from planning a self-contained unit for a relative, through the eligibility tests and qualifying costs, to the claim on line 45355.

Visual labels: Self-contained unit; Senior or DTC adult; Up to $50,000 of costs; Claim on line 45355.

What to take away

  • The MHRTC is claimed on line 45355 with Schedule 12; the CRA’s 2025 page shows 14.5% of up to $50,000 of costs, a maximum of $7,250.
  • The unit needs a private entrance, kitchen, bathroom and sleeping area, and must house a senior or a person eligible for the disability tax credit with a qualifying relative.
  • Claim in the year the renovation is completed, and only one renovation can be claimed for a qualifying individual in their lifetime.

What the credit pays for

The multigenerational home renovation tax credit, or MHRTC, helps with the cost of creating a self-contained secondary unit so that a senior or an adult eligible for the disability tax credit can live with a qualifying relative. It is a refundable credit, so it can produce a refund even if you owe no tax. You claim it on line 45355 of your return, and the CRA shows no provincial counterpart.

On the CRA’s page for the 2025 tax year, the credit is 14.5% of qualifying costs, with up to $50,000 of costs counted for each qualifying renovation, for a maximum of $7,250. Those figures are labelled 2025. Check the CRA’s page for the year you file before you budget around them.

What counts as a secondary unit

A secondary unit, as the CRA uses the term, must be self-contained and have its own entrance, kitchen, bathroom and sleeping area. It has to be newly built, or made from space that was not already a legal secondary dwelling, and it must comply with local permits, codes and by-laws. It can be inside the home or a separate structure on the same land.

All four features matter. The CRA’s own example of a converted sunroom with an ensuite bathroom and a separate entrance, but no kitchen, does not qualify. A basement apartment, a garden suite or a unit over a garage can qualify if it has everything the definition lists and the paperwork is in order.

Who the unit must be for

Someone living in the home or the new unit must be a qualifying individual: a person 65 or older at the end of the year the renovation period ends, or an adult aged 18 to 64 who is eligible for the disability tax credit. The unit must let that person live with a qualifying relation, meaning someone 18 or older who is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or of their spouse or common-law partner.

A live-in caregiver who is not a relative does not satisfy this test. The CRA’s example of an adult with a disability who finished a basement apartment for an unrelated caregiver is not eligible. The home must be owned, jointly or not, by the qualifying individual or a qualifying relation at some point in the year, and both are expected to live there within 12 months after the renovation period ends.

Who can make the claim

The person claiming must be an eligible individual: a Canadian resident for the full year who ordinarily lives, or intends to live, in the home within that 12-month window. That person is the qualifying individual, their cohabiting spouse or common-law partner, or a qualifying relation. A qualifying relation who owns the home can claim even without living there.

Several relatives can share the cost and the credit. Each claims only the costs they paid, and the total claimed for one renovation cannot exceed $50,000 of costs. In the CRA’s example, a sibling who neither owned nor lived in the home could not claim, even though they helped pay. Agree on the split in writing before filing.

Which costs qualify and which do not

Qualifying costs are reasonable amounts directly tied to the renovation, incurred after December 31, 2023 and before the renovation period ends. They include materials, professional services such as electricians, plumbers, carpenters and architects, permits, building plans and equipment rentals. If you do the work yourself, your own labour and tools are not counted.

Several costs are excluded: routine repair or maintenance, household appliances, home-entertainment devices, financing costs, and anything unsupported by receipts. Costs reasonably considered reimbursed are also reduced, including related GST/HST rebates. Work done by a relative generally does not count unless that person is registered for GST/HST. A cost used for this credit cannot also be claimed under the medical expense tax credit or the home accessibility tax credit.

When to claim and how much it is worth

Claim the credit for the year the renovation is completed, even if work began earlier. The renovation period starts with the first qualifying expense, such as a permit application, and ends at completion, for example when the work passes final inspection. A project that starts in 2025 and passes inspection in 2026 is claimed on the 2026 return.

An illustrative example: if qualifying costs are $30,000 and the rate were 14.5%, the credit would be $4,350. If costs reach $70,000, only $50,000 counts, so the credit is capped at $7,250. These use the 2025 rate shown by the CRA, so the 2026 rate should be checked. Only one renovation can be claimed for a given qualifying individual in their lifetime, so a family should decide deliberately which project to claim.

How to claim and the records to keep

For 2024 and later years, enter the credit on line 45355 and report the costs on Schedule 12, Multigenerational Home Renovation Tax Credit. Keep documents that identify the vendor, the address of the work, the dates, a description of goods or services, the amounts, GST/HST numbers where applicable, and proof of payment such as a credit card slip or cancelled cheque.

Keep permits, plans and the final inspection record as well, since they show the unit is compliant and when the renovation period ended. Check contractors’ GST/HST registrations before you pay if the expense depends on that status.

Questions to settle before you build

Before work starts, confirm who owns the property, who will pay, and whether the unit meets local rules. If the qualifying individual is under 65, confirm the disability tax credit approval. If any part of the cost may also be a medical or accessibility expense, decide which credit gets it, because the same cost cannot be used twice.

Renting the unit out later, or the change in property tax and insurance, raises separate questions. See our article on renting out a basement suite. Bring estimates, contracts, ownership details and the relatives’ names to a conversation about tax planning.

Sources & editorial notes

Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.

Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.