The Multigenerational Home Renovation Tax Credit: How Canada’s $7,500 Credit Works for Building a Suite for an Aging Parent
Bringing a parent or a relative with a disability under one roof by building a self-contained suite? This refundable federal credit quietly lowers the net cost of doing it.
How much is the Multigenerational Home Renovation Tax Credit actually worth, and who gets to claim it?
The MHRTC is a refundable federal tax credit worth 15% of your eligible renovation costs, counted on up to $50,000 of spending — so a maximum of $7,500 per renovation. Because it is refundable, you receive it even if you owe no tax. It applies when you build a self-contained secondary unit so a senior (65+) or an adult (18+) who is eligible for the Disability Tax Credit (DTC) can live with a qualifying relation. You claim it on Line 45355 using Schedule 12, starting with the 2023 tax year.
Source: Canada Revenue Agency (CRA), Line 45355 – MHRTC and Schedule 12; verified 2026-07-24
I’m Arthur Zhao. Over the years a version of the same question keeps landing on my desk: a family wants to bring an aging parent in and add a self-contained suite with its own entrance — is there federal help for that? There is. It’s the Multigenerational Home Renovation Tax Credit (MHRTC), and the numbers floating around online are frequently wrong.
Below I walk through the three things that actually decide it — who qualifies, what the suite has to look like, and how the money is calculated — using the CRA’s own definitions. One caveat up front: this is a plain-language explainer, not tax advice for your specific situation.
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First, the big idea: this is money back, not a write-off
The MHRTC (MHRTC, short for the Multigenerational Home Renovation Tax Credit) has been available since the 2023 tax year, and the single most important word in its design is refundable. A refundable credit doesn’t just shrink the tax you owe — if the credit is larger than your tax bill, the government pays you the difference in cash. It exists for a demographic reality that is quietly reshaping how families use their homes: bringing an aging parent, or an adult relative with a disability, under one roof by building them a self-contained place to live.
A refundable credit is not the same as a deduction
ℹ️Quick math: spend $50,000 on the qualifying work and your credit is 15% × $50,000 = $7,500. Spend $30,000 and it’s 15% × $30,000 = $4,500. The ceiling is set by the $50,000 spending cap, not by how much you earn.
Threshold one: who counts as the “qualifying individual”
The relative moving in has to be what the CRA calls a qualifying individual, which means one of two things:
• a senior who is 65 or older before the end of the renovation period; or
• an adult who is 18 or older and eligible for the Disability Tax Credit (DTC) at some point in the renovation-period tax year.
In other words, a parent who isn’t yet 65 but qualifies for the DTC still opens the door.
Threshold two: who actually files the claim
The person who claims the credit is what the CRA calls the eligible individual, and you have to clear two bars at once:
• you are the qualifying individual, their spouse or common-law partner, or a qualifying relation — a parent, grandparent, child, grandchild, sibling, aunt, uncle, niece or nephew (of them or of their spouse), aged 18 or older; and
• you ordinarily live, or intend to live within 12 months of the renovation ending, in the home together with the qualifying individual.
Threshold three: what kind of suite qualifies
The work has to create a genuine self-contained secondary unit. The CRA’s bright-line test: the unit needs its own private entrance, kitchen, bathroom, and sleeping area. On top of that:
• the renovation has to be enduring and integral to the home — temporary partitions and movable furniture don’t count;
• the home itself must be owned by the qualifying individual or a qualifying relation, be located in Canada, and be where you all live once the work is done.
The math: 15%, capped at $7,500
According to the Canada Revenue Agency (CRA), your credit is 15% of eligible expenses, and eligible expenses are counted only up to $50,000. That puts the mathematical ceiling at $7,500 ($50,000 × 15%). Eligible costs generally include building materials, fixtures, labour, professional fees, permits, and equipment rentals; movable items like furniture and appliances generally don’t count. The hard limit to plan around: each qualifying individual can be claimed only once in their lifetime — one renovation, one credit.
How you claim it
In the tax year you incur the costs, you complete Schedule 12 to calculate the credit and report the result on Line 45355 of your return. Keep every invoice, contract, and proof of payment — the CRA can ask to see them. The credit has been claimable since the 2023 tax year.
💡 My honest take: for a family seriously weighing whether to bring a parent in, $7,500 shouldn’t be the reason you do it — but it meaningfully lowers the net cost of building a proper suite, and that suite tends to add long-term flexibility and resale value to the home regardless. The thing to get right up front is the once-in-a-lifetime rule: don’t burn the claim on a minor change — save it for the real, full-scale build.
⚠️This is a plain-language explainer, not personal tax advice. Whether a specific expense qualifies, whether your relative meets the DTC test, and how this interacts with any provincial program all depend on your situation — confirm with a licensed accountant or tax professional before you file.
Frequently Asked Questions
What is the most this credit can put back in my pocket?
15% of eligible costs, counted on up to $50,000 of spending — a maximum of $7,500 per renovation. And it’s refundable, so you receive it even if you owe no tax that year (CRA, Line 45355, verified 2026-07-24).
My parent is under 65 — can we still qualify?
Yes. A qualifying individual can be either a senior 65 or older, or an adult who is 18+ and eligible for the Disability Tax Credit (DTC). Meeting either path is enough (CRA, Line 45355).
Does finishing a basement for my mother count?
Only if it becomes a genuine self-contained unit — the CRA requires a private entrance, kitchen, bathroom, and sleeping area, and the work has to be enduring and integral to the home. Simply adding a bedroom that shares the main kitchen and bath generally won’t qualify (CRA, Schedule 12).
Can I claim it more than once?
No. For a given qualifying individual, the credit can be claimed only once in their lifetime, for one renovation. If you’re planning to build in stages, it’s worth deciding in advance which stage should use the claim (CRA, Line 45355).
Is this a refund or a deduction — and does it matter?
It’s a refundable tax credit, not an ordinary deduction. The difference is concrete: a deduction only helps if you have taxable income to reduce, while this credit pays you the $7,500 even if you owe no tax that year (CRA, Line 45355).
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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