Today, multi-generational living is becoming more common. Whether this stems from convenient living arrangements that began during the pandemic, or it is due to the rising cost of living and the uncertain housing market, many Canadians are modifying their homes to accommodate more family members by building secondary units (like a basement apartment). And now, in an attempt to make housing more affordable, the federal government is offering a new tax credit to help make the construction costs a bit easier.
What is the multi-generational home renovation tax credit?
This one-time tax credit provides a 15% tax refund on home expenses up to $50,000 to accommodate a family member, to a maximum of $7,500.
When is it in effect?
The tax credit took effect on January 1, 2023, so you could be eligible for this tax benefit on your 2023 tax return.
What qualifications need to be met for the tax credit?
There are a few stipulations that need to be met in order to qualify for the credit:
- The occupant of the renovation. Not just anyone qualifies as an occupant for this tax credit—the renovation must be for a related adult who is 65 years or older, or for a family member living with a disability. This could include a grandparent, parent, child, grandchild, sibling, aunt, uncle, niece or nephew.
- The type of renovation. The renovation must be for a secondary suite, and it needs to have certain features, including a separate entrance, sleeping area, bathroom, and kitchen.
- The move-in time frame. The secondary suite must be inhabited within 12 months of completion.
- Not all expenses are eligible. Some expenses, such as housekeeping or the cost of appliances, aren’t eligible towards the total amount for the credit.
Are you considering renovating your home to include a suite for an elderly or disabled family member? We’ve been in the business for four generations and have some of the best renovation resources. Call anytime, we’re happy to share.