New tax credit to help offset cost of adding a secondary unit for family

September 12, 2023

Ottawa, Ontario

Canada Revenue Agency

Building a secondary unit for a senior or a family member with a disability?

The Multigenerational Home Renovation Tax Credit (MHRTC), provides a refundable tax credit of up to $7,500 for constructing a secondary suite, starting in 2023.

The value of the credit is 15 per cent of eligible expenses or $50,000 (whichever amount is less). For example, if the qualifying expenditures totaled $50,000, it would result in a refundable tax credit of $7,500 ($50,000 x 15%).

Where can I claim this credit?

You can claim this credit on line 45355 of your T1 income tax and benefit return for the renovation period for taxation year of 2023 or later. Use schedule 12 to calculate the credit for the expenses that you incurred.

You can claim one qualifying renovation during the lifetime of a qualifying individual who is a senior or an adult who is eligible for the disability tax credit.

To qualify for the MHRTC, the secondary unit should have a private entrance, kitchen and a bathroom – thereby enabling a qualifying individual (senior or a person with a disability) or a qualifying relation to live there.

Keep your receipts!

Eligible expenses must be supported by agreements, invoices, and receipts. Receipts or invoices must indicate that they are paid in full or be accompanied by other proof of payment, such as a credit card slip or cancelled cheque.

Need more information?

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