Multigenerational Home Renovation Tax Credit (MHRTC): Get Up to $7,500 Back
If you renovated your home to add a secondary suite for a senior parent or adult with a disability, you may qualify for the Multigenerational Home Renovation Tax Credit (MHRTC) — a refundable federal credit worth up to $7,500.
Unlike most home renovation credits, this one is refundable, meaning you receive cash even if you owe no tax.
What Is the MHRTC?
The MHRTC was introduced to support multi-generational living. It provides a 15% refundable tax credit on up to $50,000 of eligible renovation expenses per qualifying renovation. That is a maximum credit of $7,500 per eligible project.
Who Qualifies?
You may qualify if:
- You are the homeowner, or a qualifying relation of a person who owns the home
- You renovate to create a self-contained secondary unit within an existing home
- The secondary unit is for a qualifying senior (65+) or a qualifying adult with a disability
- The work is done by an eligible contractor (arms-length from the claimant)
The unit must be genuinely self-contained: CRA expects a private entrance, bathroom, kitchen (or kitchenette), and sleeping area.
What Expenses Are Eligible?
Eligible expenses include:
- Contractor labour for construction and renovation
- Building materials (flooring, insulation, windows, doors)
- Plumbing and electrical work
- Permits and inspections
- Kitchen and bathroom fixtures
Not eligible: appliances, tools, equipment not incorporated into the unit, or work done by unregistered workers. Each expense must be supported by an invoice from an eligible contractor.
Who Can Claim?
If the homeowner is the senior or disabled person, a qualifying relative (adult child, sibling, spouse, parent, etc.) may claim on their behalf. Expenses can also be split among multiple eligible claimants for the same project.
How to Claim
- Complete Line 45355 on your T1 return
- Keep all invoices and contractor receipts — at least 6 years
- The renovation must occur in the same calendar year as the claim
- The MHRTC is claimed in the tax year the renovation is completed. If the project spans two years (e.g., starts in 2025, finishes in 2026), all eligible expenses from both years are claimed together on the 2026 return
- Each qualifying individual (the senior or disabled adult) can only be the subject of one MHRTC claim in their lifetime
Common Mistakes and Audit Triggers
- Unit is not truly self-contained (no kitchen, no private entrance)
- Labour done by a non-arm’s-length person who is not registered for GST/HST (if they are registered, their labour can be eligible; if not, only materials qualify)
- Appliances included in the claimed amount
- Senior/disabled person does not occupy the unit within 12 months of renovation completion
- Claiming the same expenses for both MHRTC and the Home Accessibility Tax Credit (HATC)
Interaction with Other Credits
The Home Accessibility Tax Credit (HATC) also applies to renovations for seniors and disabled persons. The two credits can apply to the same renovation project but not to the same specific expenses. Split your receipts accordingly.
Key Takeaway
The MHRTC is one of the most generous home renovation credits ever introduced in Canada. If you have a parent moving in or a family member with a disability who needs a dedicated unit, the renovation could be partly funded by a $7,500 government credit — no taxes owing required.
Planning a multigenerational renovation and want to maximize your credits? Contact FinGems.ca.