Multi-Generational Home Renovation Tax Credit

Multi-Generational Home Renovation Tax Credit

‍

As the trend of multiple generations residing together becomes more prevalent and the demand for affordable housing grows, the introduction of this tax credit is overdue. Discover the details of the multigenerational home renovation tax credit and find out who qualifies by reading the article below.

What is the multigenerational home renovation tax credit?

The tax credit for multigenerational home renovations is a refundable benefit designed to aid in the expenses of renovating a qualified residence to create an eligible dwelling and secondary unit, allowing a qualifying individual to reside with a qualifying relative. The credit is valued at 15% of the lesser of qualifying expenditures or $50,000.

Qualifying Individual

A qualifying individual is an individual:

• who is 65 years or older before the end of the taxation year; or
• 18 years of age or older before the end renovation period taxation year for whom an amount is deductible under the disability tax credit.

Qualifying relation

A qualifying relation is an individual who is:

• at least 18 years of age by the end of the year;
• at any time in the year, a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or the qualifying individual’s cohabitating spouse or common-law partner.

What is an eligible dwelling?

A housing unit located in Canada that is owned by the qualifying individual or a qualifying relation of the qualifying individual at any time in the renovation period taxation year and where they intend to primarily reside within 12 months after the renovation period.

What is a secondary unit?

A self-contained housing unit with private entrance, kitchen, bathroom and sleeping area. This can be newly constructed or added onto an existing space that did not meet requirements to be considered a secondary dwelling unit.

What types of expenses do not qualify?

• Furniture
• Household appliances and devices
• Routing repair, indoor and outdoor maintenance, security, or landscaping
• Cost of financing the renovation

How is the credit calculated?

It is calculated by multiplying the lowest personal income tax rate (15%) by the lesser of:

• $50,000
• the amount of qualifying expenditures incurred by the eligible individual

Only one qualifying renovation is permitted during the lifetime of a qualifying individual.

‍

Can I hire a family member to perform the work or help me?

Expenses are only eligible if that person is registered for GST/HST.