In today’s competitive housing market and with the aging baby boomer generation, more families are choosing to live together in multigenerational homes. This lifestyle has countless practical and communal benefits, and it also makes a lot of financial sense.
In 2022 the Canadian government introduced the Multigenerational Home Renovation Tax Credit (MHRTC), a refundable credit aimed at helping families with the cost of creating secondary units for seniors or adults with disabilities. The credit is available for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date.
Read on for a high-level overview and find out if your family qualifies for this credit!
What is the MHRTC?
The MHRTC provides a 15% tax credit on eligible renovation expenses up to $50,000, allowing families to save up to $7,500. This credit applies to renovations that create a secondary living unit for a senior or a qualifying adult with disabilities—a fantastic incentive for families looking to accommodate aging parents.
Who Qualifies?
Qualifying Individual:
– A senior aged 65 or older.
– An adult eligible for the disability tax credit.
Qualifying Relation:
– A family member such as a parent, grandparent, child, or sibling who is at least 18 years old.
Eligible Renovations
According to the Canada Revenue Agency’s MHRTC page, the renovation must be of an “enduring nature, integral to the home, and establish a secondary unit” within the dwelling. This could include modifications to create a self-contained housing unit with a private entrance, kitchen, bathroom, and sleeping area.
Claiming the Credit
Eligible expenses include the cost of materials and labour necessary for the renovation, provided they are supported by appropriate documentation. Expenses must be directly attributable to the qualifying renovation, such as building materials, permits, and professional services. Be sure to keep good records and receipts!
Key Benefits
The MHRTC is an important initiative as it supports multigenerational living and makes home modifications more affordable, providing financial support to and enhancing the quality of life for families with seniors or adults with disabilities. This style of living has so many advantages for families today; not just financial gains. Multigenerational living fosters strong family bonds, helps reduce the needs for childcare, enhances support for elderly, and preserves culture and legacy for future generations. For anyone considering renovations to accommodate more family, we recommend visiting the Canada Revenue Agency’s MHRTC page for more details on this appealing federal initiative.
Shared Vision Developments specializes in renovations that accommodate growing families—whether it’s an addition, adding a second story, or updating a basement with more amenities—it comes down to a smart design that utilizes the space most effectively.
Contact us today to discuss multigenerational living projects and utilize this government tax credit!
