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Who can claim

To be eligible to claim the MHRTC, your renovation and the people who currently live, or plan to live, in the existing dwelling and secondary unit must meet certain criteria.

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Eligibility checklist

All of the following conditions must be met for you to claim the MHRTC:

  • What a secondary unit is

    A secondary unit:

    • Is a self-contained housing unit with a private entrance, kitchen, bathroom and sleeping area
    • Is newly constructed or created from an existing living space that did not already meet local requirements to be considered a secondary dwelling unit
    • Meets applicable local requirements, permits, codes and by-laws
    • 65 years of age or older at the end of the renovation period tax year
    • 18 to 64 years of age and eligible for the disability tax credit (DTC) at any time in the renovation period tax year (or would be if the attendant care restriction were not counted)

      Learn more: Disability tax credit (DTC)

    • Ordinarily resides, or intends to ordinarily reside, in the eligible dwelling within 12 months of the end of the renovation period of a qualifying renovation and is one of the following:
      • A qualifying individual
      • The cohabitating spouse or common-law partner of a qualifying individual (at any time in the tax year that you are making the claim for)
      • A qualifying relation of a qualifying individual
    • Owns the eligible dwelling (or is the beneficiary of a trust that owns the eligible dwelling) and is a qualifying relation of a qualifying individual
    Who a qualifying relation is

    A qualifying relation is both:

    • 18 years of age or older at the end of the tax year that the credit is being claimed for
    • A parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual (or the qualifying individual’s cohabiting spouse or common-law partner) at any time in the renovation period tax year

    If you are sharing renovation costs with another individual, see Sharing renovation costs.

    • Located in Canada
    • Owned (jointly or not) by the qualifying individual or a qualifying relation of that individual (or a trust if the qualifying individual or qualifying relation is a beneficiary of the trust) at any time during the renovation period tax year
    • Ordinarily inhabited (or is reasonably expected to be ordinarily inhabited) by both the qualifying individual and a qualifying relation of that individual within 12 months after the end of the renovation period
    Building a separate structure as the secondary unit

    The secondary unit does not need to be physically part of an existing structure as long as it is on the same land as the eligible dwelling.

    Usually, the amount of land that can be considered part of the eligible dwelling is limited to half a hectare (1.24 acres). However, if it can be shown that more land is needed to use and enjoy the home, then more than half a hectare can be considered as part of the eligible dwelling.

You need all of the above to be eligible

To be eligible to claim the MHRTC, you must meet all of the criteria above.

 

If an individual dies

If an eligible individual or qualifying individual dies, special rules apply.

For the purpose of claiming the MHRTC, the deceased individual is considered to be:

  • a resident of Canada at the time of death and until the end of the year, if they were resident in Canada immediately before they died
  • the same age at the end of the year as they would have been if they were still alive at the end of the year
  • the cohabiting spouse or common-law partner of another individual (referred to as the "surviving spouse") at the end of the year if:
    • The deceased individual and surviving spouse were cohabiting immediately before death
    • The surviving spouse is not the cohabiting spouse or common-law partner of someone other than the deceased individual at the end of the year

Sharing renovation costs

Some families may choose to share the renovation costs between two or more family members. When this happens, the credit may be split between them as long as certain conditions are met.

See Splitting the credit between eligible individuals for more information.

 

Examples of situations that do and do not qualify

A family sharing the cost of a renovation

Fatima, Ali and Abdul are adult siblings:

  • Fatima owns her own house
  • Ali lives in a house Fatima owns
  • Abdul lives in a separate house that he owns

Their father, Yusuf, is 78 years old and no longer able to live independently. Together, the family decides that the best living situation for Yusuf is to live with Ali.

They add a second story to the existing house that Ali lives in so that it has a separate entrance, bedroom, bathroom and kitchen. Ali will move to the apartment upstairs and Yusuf will live on the main floor of the house.

Abdul, Fatima and Yusuf agree to share the cost of the renovation and Ali will continue paying the utilities for the property and help care for Yusuf when he moves in.

The renovation begins in July 2023 and is completed by November 2023. Yusuf moves in to Ali's house in December 2023.

By the end of the renovation, Abdul, Fatima and Yusuf had incurred the following expenses:

  • Abdul: $10,000
  • Fatima: $20,000
  • Yusuf: $20,000

In this situation, the MHRTC may be split and claimed by Fatima and Yusuf on their 2023 returns.

Yusuf may claim the $20,000 of eligible renovation expenses that he incurred because he is over 65 years of age and the new secondary unit allows him to live with his son Ali (a qualifying relation).

Fatima can claim $20,000 of eligible renovation expenses that she incurred because:

  • She is a qualifying relation of Yusuf (qualifying individual)
  • She owns the house that was renovated to create the secondary unit that allows Yusuf (qualifying individual) to live with Ali (qualifying relation)

Abdul cannot claim his $10,000 of expenses related to the renovation on his return as part of the MHRTC because he does not own and does not occupy the dwelling that Yusuf moved into.

Ali cannot claim the MHRTC on his return because he did not incur any eligible expenses related to the renovation.

If the eligible expenses that Yusuf and Fatima incurred had been over the maximum, they would have to agree on the portion of the credit that each would claim on their returns and keep their receipts to show the eligible expenses that each of them incurred. Neither Yusuf nor Fatima can claim the expenses that Abdul incurred.

An adult with a disability creating a secondary unit for a caregiver

Martin is an adult who qualifies for the disability tax credit. He recently decided to finish his basement into a separate apartment so that he can hire a live-in caregiver. The apartment will have a separate entrance, bedroom, kitchen and bathroom.

After the apartment renovation is completed, Martin hires a live-in caregiver who moves into the secondary unit. The caregiver is not related to Martin.

Although Martin may be able to claim some of his caregiving expenses another way, he cannot claim the renovation as part of the MHRTC because the caregiver who moved into the newly-renovated basement apartment is not his relative.

To be eligible to claim the MHRTC, the basement apartment must allow Martin to live with a qualifying relation.

Adding an extra bedroom for an elderly relative

Mo's father recently died and his mother, Viv, now needs live-in care to meet her day-to-day needs. To accommodate Viv's needs, Mo decides to convert his large sunroom into a bedroom with an ensuite bathroom so that Viv can move in.

There is a separate entrance to the sunroom from the back of the house. Mo does not add a kitchen to the newly renovated space because Viv will not be cooking for herself.

Mo cannot claim the MHRTC for this renovation because the newly renovated space does not qualify as a secondary unit. To qualify, a secondary unit must have a separate entrance, bedroom, bathroom and kitchen.

Building a separate unit for a relative who moves in the following year

Javi's aunt Lucie recently turned 65 years old. While Lucie is still able to live independently, she can no longer manage the upkeep on her large house and wants to downsize to live closer to her family.

Javi's local laws allow him to have two housing units on his 1 acre property, so he decides to build a small separate house for Lucie to live in on his property.

The new house will have a small bedroom, kitchen and bathroom. Javi starts the renovation in April 2023.

The new house is completed and ready for Lucie to move in by October 2024. However, it takes Lucie longer than anticipated to sell her old home and so she doesn't move to the new unit at Javi's house until April 2025.

Assuming Javi has eligible expenses relating to this renovation that were not reimbursed or claimed, he will be eligible to claim the MHRTC on his 2024 tax return because:

  • The renovation was completed in 2024
  • The new unit meets all of the necessary requirements to qualify as a secondary unit
  • Lucie is a qualifying individual who is 65 years of age or older at the end of the tax year Javi is making the claim for
  • Lucie will be sharing the dwelling with her nephew Javi (qualifying relation)
  • Lucie intends to occupy the secondary unit within 12 months of its completion
Renovating two houses for the same relative

It is now 2024 and Jeff is in the process of renovating a new unit in his house for his grandmother, Mary, to live in. Mary is planning to move into Jeff's house in 2025. Mary's son, Steve, has already successfully claimed the MHRTC on his 2023 tax return for a unit in his house that Mary is currently living in.

Jeff cannot claim the MHRTC for the renovation of his house because Steve already made an MHRTC claim for Mary.

Only one renovation can be claimed for a qualifying individual (Mary) during their lifetime.

 

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