Thinking about upgrading your home to accommodate a senior family member or an adult with disabilities? The Canadian government is offering a significant incentive—the Multigenerational Home Renovation Tax Credit (MHRTC), providing up to $7,500 in tax relief for eligible renovations completed in 2025. This initiative aims to support families in creating inclusive living spaces.
What Is the MHRTC?
The MHRTC is a refundable tax credit introduced by the Canada Revenue Agency (CRA) to assist families in constructing secondary suites for seniors or adults with disabilities. By covering 15% of eligible renovation expenses up to $50,000, the credit offers a maximum benefit of $7,500.
Who Qualifies for the MHRTC?
To be eligible for the MHRTC, you must meet the following criteria:
- Permanent Residency: You must be a permanent resident of Canada.
- Home Ownership: You should own the home undergoing renovation.
- Tax Compliance: Ensure all property taxes are paid, and previous tax filings are up to date.
- Residency: At least one family member must reside in the home during the renovation.
- Qualifying Individual: The renovation must benefit a senior (65+) or an adult eligible for the Disability Tax Credit.
What Renovations Are Covered?
The MHRTC covers expenses directly related to creating a self-contained secondary unit within your home. Eligible renovations include:
- Structural Modifications: Adding or modifying walls, floors, and ceilings.
- Plumbing and Electrical Work: Installing or upgrading systems to support the new unit.
- Kitchen and Bathroom Installations: Creating functional cooking and sanitation areas.
- Accessibility Features: Incorporating ramps, wider doorways, and other features to enhance mobility.
What Expenses Are Not Covered?
Certain expenses are excluded from the MHRTC, such as:
- Routine Maintenance: Regular repairs or maintenance tasks.
- Appliances and Furniture: Purchases of household items not integral to the renovation.
- Non-Arm’s Length Transactions: Services provided by relatives not registered for GST/HST.
How to Claim the MHRTC
To claim the MHRTC:
- Complete the Renovation: Ensure the renovation is fully completed in 2025.
- Document Expenses: Keep all receipts and invoices related to the renovation.
- Fill Out Schedule 12: Use CRA’s Schedule 12 to report qualifying expenses.
- File Your Tax Return: Enter the calculated credit on line 45355 of your 2025 T1 tax return.
When Will You Receive the Credit?
The MHRTC is a refundable tax credit applied when you file your 2025 tax return in 2026. If the credit exceeds your tax liability, you will receive the remaining amount as a refund.
Final Thoughts
The MHRTC offers a valuable opportunity for Canadian families to create inclusive living spaces for seniors and adults with disabilities. By understanding the eligibility criteria and ensuring proper documentation, you can take full advantage of this tax credit to support your family’s needs.
FAQs
Q1: Can I claim the MHRTC for multiple renovations in the same year?
Yes, if you complete separate qualifying renovations for different individuals, you can claim the MHRTC for each, up to the maximum limit per renovation.
Q2: What happens if my renovation isn’t completed by December 31, 2025?
To be eligible for the MHRTC, the renovation must be fully completed within the 2025 tax year. Incomplete renovations will not qualify.
Q3: Are there any income restrictions for claiming the MHRTC?
No, the MHRTC does not have income restrictions. Eligibility is based on residency, home ownership, and the nature of the renovation.
Q4: Can I claim the MHRTC if I hire a family member for the renovation work?
Services provided by a family member are only eligible if they are registered for GST/HST under the Excise Tax Act.
Q5: Where can I find more information or assistance with the MHRTC?
For detailed information and assistance, visit the official CRA website or consult a tax professional.