Unlocking Family Harmony: Navigating the Multigenerational Home Renovation Tax Credit (MHRTC)

The concept of a multigenerational home is not just about living together; it's about thriving together. With the introduction of the Multigenerational Home Renovation Tax Credit (MHRTC), families have a golden opportunity to reimagine their living spaces to support this collective way of life.

Introduced in 2023, the MHRTC is a refundable tax credit aimed at helping families create a harmonious and self-contained living environment for seniors or adults eligible for the disability tax credit. This initiative recognizes the importance of family support and the value of inclusive living arrangements.To be eligible for the MHRTC, renovations must be made to craft a self-contained secondary unit within your home. This unit should be designed with accessibility and comfort in mind, providing a safe and independent living space for an elderly family member or an adult with a disability.

Up to $50,000 in qualifying renovation expenses can be claimed per renovation, with the tax credit offering 15% back on your costs, capping at $7,500 per claim. This financial leg-up makes it easier for families to undertake necessary renovations without the full burden of the costs.

Eligibility checklist

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

  • You had renovation costs to create a secondary unit within the dwelling or on the property
  • The renovation was completed in the tax year that you are making the claim, regardless of when the renovation started
  • One of the individuals living in the existing dwelling or the new secondary unit must be a qualifying individual. A qualifying individual is either: 65 years of age or older at the end of the renovation period tax year OR 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)
  • This is the only MHRTC claim for the qualifying individual (senior 65 years of age or older, or adult who is eligible for the DTC). Only one renovation can be claimed for a qualifying individual during their lifetime.

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.

Expenses that qualify

The renovation expenses that you can claim must be qualifying expenditures. A qualifying expenditure is all of the following:

  • A reasonable expense that is directly attributable to the qualifying renovation of an eligible dwelling
  • Made or incurred after December 31, 2022, and before the end of the renovation period
  • Made or incurred by an eligible individual (or a trust that the eligible individual is a beneficiary of)

A qualifying expenditure may include:

  • Goods acquired or services received, including work performed by professionals (such as electricians, plumbers, carpenters or architects)
  • Outlays or expenses for permits required
  • Rental of equipment used in the course of the qualifying renovation

Expenses that do not qualify

  • Annual, recurring or routine repair or maintenance
  • Household appliances
  • Electronic home-entertainment devices
  • Housekeeping, security monitoring, gardening, outdoor maintenance or similar services
  • Financing costs for the qualifying renovation
  • Goods or services provided by a person not dealing at arm’s length with the individual unless that person is registered for GST/HST under the Excise Tax Act
  • Expenses that can reasonably be considered to have been reimbursed
  • Expenses not supported by receipts
  • Expenses that have already been claimed under the medical expense tax credit or home accessibility tax credit, or both

Investing in such a renovation project not only enhances the quality of life for your loved ones but also adds untold value to your property. By adapting your home to be more multigenerational-friendly, you're future-proofing it against the evolving needs of your family and making a wise financial decision that benefits everyone involved. For more information and guide to make the claims: Multigenerational Home Renovation Tax Credit (MHRTC).

Please note that the information provided in this blog is for general informational purposes only and should not be considered as professional tax advice. We recommend consulting with a certified tax professional or financial advisor for advice on your particular situation before making any decisions based on the Multigenerational Home Renovation Tax Credit (MHRTC) or any other tax-related matters.

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