How to Claim the Multigenerational Home Renovation Tax Credit for a Secondary Unit in Canada
Learn how to claim Canada's Multigenerational Home Renovation Tax Credit for creating a self-contained secondary unit for a senior or an adult eligible for the Disability Tax Credit, including the 2025 credit rate, eligible expenses, Schedule 12, occupancy rules and the lifetime limit.
CA Canada
Taxes & Money ~ 14 min read
17 FAQ
Updated 2026-08-27
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If you completed a qualifying multigenerational home renovation in 2025, you may claim the refundable Multigenerational Home Renovation Tax Credit on your 2025 tax return filed in 2026. The renovation must create a self-contained secondary unit with its own private entrance, kitchen, bathroom and sleeping area so a qualifying individual can live with a qualifying relative. A qualifying individual is someone who is 65 or older at the end of the renovation year, or age 18 to 64 and eligible for the Disability Tax Credit during that year. For a renovation completed in 2025, eligible claimants can collectively claim up to $50,000 of qualifying expenses for that renovation. The 2025 credit is 14.5%, for a maximum refundable credit of $7,250. Complete Schedule 12 and enter the calculated credit on line 45355. Only one qualifying renovation can be claimed for each qualifying individual during that person's lifetime.
What you need
- The renovation must create a qualifying self-contained secondary unit within the dwelling or on the same property.
- The secondary unit must have a private entrance, kitchen, bathroom and sleeping area.
- The unit must be newly constructed or created from space that did not already meet local requirements for a secondary dwelling unit.
- The secondary unit must comply with applicable local requirements, permits, codes and by-laws.
- The renovation must be completed in the tax year for which the credit is claimed.
- At least one person living or intending to live in the existing dwelling or secondary unit must be a qualifying individual who is either age 65 or older at the end of the renovation year, or age 18 to 64 and eligible for the Disability Tax Credit at any time in that year, subject to the CRA rules.
- The eligible dwelling must be located in Canada and owned, jointly or otherwise, by the qualifying individual or a qualifying relation, or by a qualifying trust as permitted by the CRA rules.
- The qualifying individual and a qualifying relation must ordinarily inhabit, or reasonably be expected to ordinarily inhabit, the eligible dwelling within 12 months after the renovation period ends.
- The person claiming expenses must meet the CRA definition of an eligible individual and can claim only qualifying expenditures they incurred.
- No previous MHRTC may have been claimed for the same qualifying individual because only one qualifying renovation can be claimed for that person during their lifetime.
- Keep detailed invoices, receipts and proof of payment supporting the expenses claimed.
Eligibility
The Multigenerational Home Renovation Tax Credit is a refundable federal tax credit for certain renovations that establish a self-contained secondary unit so a qualifying senior or an adult eligible for the Disability Tax Credit can live with a qualifying relative.
A qualifying individual is a person who is at least 65 years old at the end of the tax year in which the renovation period ends, or a person age 18 to 64 who is eligible for the Disability Tax Credit at any time in that year, including the CRA's specified treatment of the attendant-care restriction.
A qualifying relation must be at least 18 years old at the end of the claim year and be the qualifying individual's parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew, or one of these relatives of the qualifying individual's cohabiting spouse or common-law partner.
The person claiming the credit must be an eligible individual under the CRA rules. This can include the qualifying individual, their cohabiting spouse or common-law partner, a qualifying relation who ordinarily resides or intends to reside in the eligible dwelling within the required period, or a qualifying relation who owns the eligible dwelling, depending on the circumstances.
The person claiming must be resident in Canada from January 1 to December 31 of the year for which the claim is made, subject to special rules that apply when an eligible or qualifying individual dies.
How to do it
- Confirm that the person the renovation is intended to accommodate is a qualifying individual: either age 65 or older at the end of the renovation year, or age 18 to 64 and eligible for the Disability Tax Credit during that year.
- Confirm that the qualifying individual will live with a qualifying relative and that the dwelling is an eligible dwelling located in Canada.
- Make sure the renovation creates a genuinely self-contained secondary unit with a private entrance, kitchen, bathroom and sleeping area and that the unit meets applicable local permits, codes and by-laws.
- Determine the renovation period. It begins when the first qualifying expenditure is made or incurred and ends when the qualifying renovation is completed, such as when final inspection or other proof of completion is obtained.
- Identify qualifying expenses directly attributable to the renovation and remove non-qualifying, reimbursed or unsupported expenses.
- If more than one eligible individual paid qualifying expenses, decide how the claim will be divided. Each person can claim only expenses they incurred, and the combined qualifying expenses claimed for one renovation cannot exceed $50,000.
- Keep invoices, receipts, contractor details and proof of payment. Do not claim the same expense again for the medical expense tax credit or Home Accessibility Tax Credit.
- Complete Schedule 12, Multigenerational Home Renovation Tax Credit, for the tax year in which the renovation was completed.
- Enter the resulting refundable credit on line 45355 of your income tax and benefit return.
- File the return electronically through an eligible CRA filing method or submit a paper return, and keep all supporting documents in case the CRA requests them.
How much is the Multigenerational Home Renovation Tax Credit for 2025?
For a qualifying renovation completed in 2025, the CRA allows eligible individuals to claim up to $50,000 of qualifying expenditures for that renovation.
The 2025 Multigenerational Home Renovation Tax Credit rate is 14.5%. This means the maximum refundable federal credit for one qualifying renovation completed in 2025 is $7,250.
| Qualifying renovation expenses | 2025 credit at 14.5% |
|---|---|
| $10,000 | $1,450 |
| $30,000 | $4,350 |
| $50,000 or more | Maximum $7,250 |
Because the MHRTC is refundable, it can generate a refund even if the credit is greater than the federal tax you otherwise owe.
What renovation qualifies for the MHRTC?
The renovation must establish a self-contained secondary housing unit within an existing dwelling or on the same property.
The CRA requires the secondary unit to have:
- a private entrance;
- a kitchen;
- a bathroom;
- a sleeping area.
The secondary unit must be newly constructed or created from existing living space that did not already satisfy local requirements for a secondary dwelling unit. It must also comply with applicable local permits, building codes and by-laws.
Can the secondary unit be a separate building?
Yes. The CRA states that the secondary unit does not have to be physically attached to the existing house. It can be a separate structure as long as it is located on the same land as the eligible dwelling and all other requirements are met.
The portion of land normally treated as part of an eligible dwelling is generally limited to one-half hectare, or 1.24 acres, unless more land can be shown to be necessary for the use and enjoyment of the home.
Does adding only a bedroom qualify?
No. A renovation that merely adds a bedroom, even with a bathroom and separate entrance, does not meet the CRA definition of a secondary unit if it does not include all required features, including a kitchen.
Who is a qualifying individual?
The renovation must accommodate a qualifying individual. For the tax year in which the renovation is completed, that person must be either:
- 65 years of age or older at the end of the tax year; or
- 18 to 64 years of age and eligible for the Disability Tax Credit at any time during that tax year, subject to the CRA rules.
The qualifying individual can live in either the original part of the dwelling or the newly created secondary unit. The rules do not require the senior or adult eligible for the DTC to occupy the new unit specifically, provided the arrangement otherwise meets the MHRTC conditions.
Who counts as a qualifying relative?
A qualifying relation must be at least 18 years old at the end of the tax year and must have one of the relationships specified by the CRA.
A qualifying relation can be the qualifying individual's:
- parent or grandparent;
- child or grandchild;
- brother or sister;
- aunt or uncle;
- niece or nephew.
The same relationships through the qualifying individual's cohabiting spouse or common-law partner can also qualify.
Who can actually claim the renovation credit?
The person who claims the MHRTC must be an eligible individual who incurred qualifying renovation expenses.
Depending on the circumstances, an eligible individual may include:
- the qualifying senior or adult eligible for the DTC;
- the qualifying individual's cohabiting spouse or common-law partner;
- a qualifying relation who ordinarily resides or intends to reside in the dwelling within the required period;
- a qualifying relation who owns the eligible dwelling;
- an eligible individual who is a beneficiary of a trust that owns the dwelling, when the CRA's trust rules are met.
A relative who simply contributes money but does not meet the eligible-individual rules cannot automatically claim the credit.
What is an eligible dwelling?
The renovated dwelling must:
- be located in Canada;
- be owned, jointly or otherwise, by the qualifying individual or a qualifying relation, or by a qualifying trust as permitted by the rules;
- be ordinarily inhabited, or reasonably expected to be ordinarily inhabited, by both the qualifying individual and a qualifying relation within 12 months after the renovation period ends.
When must the senior or adult with a disability move in?
The qualifying individual and qualifying relation must ordinarily inhabit, or reasonably be expected to ordinarily inhabit, the eligible dwelling within 12 months after the end of the renovation period.
The move does not necessarily have to occur before December 31 of the year the renovation is completed. For example, a renovation completed late in one year can still qualify when the qualifying person intends to move in during the following year, provided the 12-month requirement and all other conditions are satisfied.
Which year do you claim the MHRTC?
You claim the credit for the tax year in which the qualifying renovation period ends, regardless of when construction started.
The renovation period begins when the first qualifying expenditure is made or incurred for the renovation and ends when the qualifying renovation is completed. The CRA gives final inspection or other proof of project completion as examples of when a renovation may be considered completed.
For example, if work began in 2024 but the qualifying secondary unit was completed in 2025, the eligible expenses are claimed on the 2025 tax return filed in 2026, subject to all expense and eligibility rules.
What expenses can you claim?
Qualifying expenditures must be reasonable and directly attributable to the qualifying renovation of the eligible dwelling.
Eligible expenses can include:
- building materials;
- fixtures;
- services provided by electricians, plumbers, carpenters and other contractors;
- architectural or professional services directly related to the renovation;
- building plans;
- required permits;
- equipment rentals used for the qualifying renovation.
Can you claim expenses if you do the renovation yourself?
Yes, but not your own labour. If you perform the work yourself, the CRA allows qualifying costs such as building materials, fixtures, equipment rentals, plans and permits when the other conditions are met.
You cannot claim the value of your own labour or the cost of your own tools.
Can you pay a family member to do the work?
Goods or services supplied by someone related to the qualifying individual or eligible individual generally do not qualify unless that person is registered for GST/HST and the other MHRTC requirements are satisfied.
Which renovation expenses do not qualify?
The CRA excludes several categories of expenses, including:
- annual, recurring or routine repairs and maintenance;
- household appliances;
- electronic home-entertainment devices;
- housekeeping services;
- security monitoring;
- gardening and outdoor maintenance services;
- financing costs for the renovation;
- expenses that have been reimbursed or can reasonably be considered reimbursed;
- expenses that are not supported by receipts;
- non-arm's-length goods or services unless the applicable GST/HST registration condition is satisfied;
- expenses already claimed for the medical expense tax credit or Home Accessibility Tax Credit.
Can you claim the same expense under another renovation or medical credit?
No. The CRA states that the same expense cannot be claimed for the MHRTC and also claimed under the medical expense tax credit or the Home Accessibility Tax Credit.
You must also reduce MHRTC expenses by amounts that can reasonably be considered reimbursed, including relevant assistance or rebates.
Can family members split the MHRTC?
Yes. Two or more eligible individuals who share the cost of the same qualifying renovation may split the claim.
Each claimant:
- must independently qualify as an eligible individual;
- can claim only qualifying expenses that they personally incurred;
- must coordinate the claim so total qualifying expenditures claimed for the renovation do not exceed $50,000;
- cannot claim if an MHRTC was previously claimed for that qualifying individual.
For example, if eligible family members collectively incurred $60,000 of qualifying costs, they may decide how to divide up to $50,000 of those expenses among their claims, but nobody can claim more expenses than they personally incurred.
Is there a lifetime limit for the Multigenerational Home Renovation Tax Credit?
Yes. Only one qualifying renovation can be claimed for each qualifying individual during that person's lifetime.
This is an important restriction. If an MHRTC has already been successfully claimed for a renovation that accommodated a particular senior or adult eligible for the DTC, another family member cannot later obtain a second MHRTC for another renovation for that same qualifying individual.
Can you claim more than one renovation in the same year?
Yes, potentially. If separate qualifying renovations are completed for different qualifying individuals and all conditions are satisfied for each renovation, the CRA allows the claims to be calculated separately.
The lifetime one-renovation limit continues to apply separately to each qualifying individual.
How to claim the MHRTC on your tax return
Use Schedule 12, Multigenerational Home Renovation Tax Credit, to report qualifying renovation expenses and calculate the credit.
For 2024 and later tax years, enter the calculated MHRTC on line 45355 of your income tax and benefit return.
For a renovation completed in 2025, use the 2025 Schedule 12 when preparing the return filed in 2026.
Can you claim the Multigenerational Home Renovation Tax Credit online?
Yes. There is no separate online MHRTC application. You claim the credit as part of your personal income tax return.
If you are eligible to file electronically, CRA-certified tax software can include Schedule 12 and transmit the return through the appropriate electronic filing service. You can also file a paper return when required.
What receipts and records should you keep?
The CRA requires supporting documents to clearly show the goods or services purchased and payment made.
Your records should include, as applicable:
- the vendor or contractor's identifying information and business address;
- the contractor's GST/HST registration number, if applicable;
- a description and quantity of goods purchased;
- the purchase date;
- delivery dates and delivery slips when applicable;
- a description of the work or services performed;
- the address where the work was performed;
- invoice amounts;
- proof that the invoice was paid in full, such as a paid receipt, credit card record or cancelled cheque.
Keep these documents with your tax records in case the CRA reviews the claim.
How long does an MHRTC claim take to process?
The CRA does not process the MHRTC through a separate application. It is assessed as part of your T1 income tax return.
For 2026-2027, the CRA service standard for an on-time digital T1 return is to issue the notice of assessment within 2 weeks of receiving the return.
For an on-time paper T1 return, the service standard is 12 weeks.
These standards exclude certain situations, including returns where the CRA needs additional information or review, so an MHRTC claim may take longer if supporting documentation is requested.
Does it cost anything to claim the MHRTC?
The CRA does not charge a separate fee to claim the Multigenerational Home Renovation Tax Credit.
The renovation costs themselves remain your responsibility, and separate fees may apply for building permits, contractors, professionals, tax software or tax preparation services.
Can a basement suite qualify?
Yes, if it meets all of the rules. A basement renovation can qualify when it creates a new self-contained secondary housing unit with a private entrance, kitchen, bathroom and sleeping area, satisfies local requirements and allows the qualifying individual to live with a qualifying relative.
A finished basement that already met local requirements as a secondary dwelling unit before the renovation would not satisfy the CRA requirement that the qualifying secondary unit be newly constructed or created from living space that did not already meet those requirements.
Can a garden suite or laneway-style unit qualify?
A separate structure can potentially qualify because the CRA does not require the secondary unit to be physically attached to the original dwelling. It must be on the same land as the eligible dwelling and satisfy all other MHRTC conditions, including local permits, codes and by-laws.
Can you build the secondary unit for a caregiver?
Building a separate unit solely for an unrelated caregiver does not qualify for the MHRTC.
The purpose of the program is to allow a qualifying senior or adult eligible for the DTC to reside with a qualifying relation. The CRA specifically gives an example in which an adult eligible for the DTC creates a basement apartment for an unrelated live-in caregiver and the renovation does not qualify.
MHRTC checklist before filing
- Confirm the qualifying individual is age 65 or older or meets the DTC-related rule.
- Confirm the qualifying individual will live with a qualifying relative.
- Confirm the property is an eligible dwelling in Canada.
- Confirm the new unit has a private entrance, kitchen, bathroom and sleeping area.
- Confirm the unit complies with local permits, codes and by-laws.
- Confirm the renovation was completed in the tax year you are claiming.
- Check that no previous MHRTC was claimed for the same qualifying individual.
- Separate qualifying expenses from routine maintenance, appliances, financing and other excluded costs.
- Remove reimbursed amounts.
- Do not double claim expenses used for the medical expense tax credit or Home Accessibility Tax Credit.
- Coordinate the claim with other eligible family members so the total does not exceed $50,000 per qualifying renovation.
- Complete Schedule 12 and enter the credit on line 45355.
- Keep invoices, receipts and proof of payment in case the CRA asks for them.
Frequently asked questions
How much is the Multigenerational Home Renovation Tax Credit for 2025?
For a qualifying renovation completed in 2025, eligible individuals can collectively claim up to $50,000 in qualifying expenses. The 2025 credit rate is 14.5%, so the maximum refundable credit for one qualifying renovation is $7,250.
Who qualifies for the Multigenerational Home Renovation Tax Credit?
The renovation must allow a qualifying individual to live with a qualifying relative. The qualifying individual must be age 65 or older at the end of the renovation year, or age 18 to 64 and eligible for the Disability Tax Credit during that year, subject to the CRA rules.
What is considered a self-contained secondary unit for the MHRTC?
The CRA requires a self-contained housing unit with its own private entrance, kitchen, bathroom and sleeping area. It must be newly constructed or created from existing space that did not already meet local requirements as a secondary dwelling unit and must comply with applicable permits, codes and by-laws.
Can a basement apartment qualify for the Multigenerational Home Renovation Tax Credit?
Yes. A basement apartment can qualify if the renovation creates a new self-contained secondary unit with a private entrance, kitchen, bathroom and sleeping area and all other eligibility requirements are met.
Can a separate garden suite qualify for the MHRTC?
Potentially. The CRA says the secondary unit does not have to be physically part of the existing house as long as it is on the same land as the eligible dwelling and meets all other requirements.
What renovation expenses can I claim for the MHRTC?
Qualifying costs can include reasonable expenses directly related to the renovation, such as building materials, fixtures, contractor and professional services, building plans, required permits and equipment rentals.
Can I claim my own labour if I renovate the secondary suite myself?
No. If you perform the work yourself, eligible costs can include materials, fixtures, equipment rentals, plans and permits, but the CRA does not allow you to claim the value of your own labour or your tools.
Can I pay a family member to do the renovation work?
Expenses for goods or services supplied by a related person generally do not qualify unless that person is registered for GST/HST and all other MHRTC conditions are met.
Can two family members split the Multigenerational Home Renovation Tax Credit?
Yes. Eligible individuals who shared qualifying renovation costs can split the claim. Each person can claim only expenses they incurred, and the combined qualifying expenses claimed for one renovation cannot exceed $50,000.
Can the MHRTC be claimed more than once for the same senior?
No. Only one qualifying renovation can be claimed for each qualifying individual during that person's lifetime.
Can I claim two MHRTC renovations in the same year?
Potentially yes if the renovations are separate qualifying renovations for different qualifying individuals and all eligibility conditions are met for each one. The lifetime one-renovation rule applies separately to each qualifying individual.
When do I claim the Multigenerational Home Renovation Tax Credit?
Claim the MHRTC for the tax year in which the qualifying renovation is completed, even if work began in an earlier year.
What CRA form do I use for the Multigenerational Home Renovation Tax Credit?
Complete Schedule 12, Multigenerational Home Renovation Tax Credit, and enter the resulting credit on line 45355 of your income tax and benefit return.
Can I claim the MHRTC and the Home Accessibility Tax Credit for the same expense?
No. The CRA states that an expense included in an MHRTC claim cannot also be claimed for the Home Accessibility Tax Credit or the medical expense tax credit.
Do renovation expenses have to be supported by receipts?
Yes. Unsupported expenses do not qualify. Keep invoices, receipts, contractor information and proof of payment showing the goods or services, dates, amounts and work performed.
How soon must the qualifying relative move into the renovated property?
The qualifying individual and a qualifying relation must ordinarily inhabit, or reasonably be expected to ordinarily inhabit, the eligible dwelling within 12 months after the renovation period ends.
Is the Multigenerational Home Renovation Tax Credit refundable?
Yes. The MHRTC is a refundable federal tax credit, so an eligible credit can produce a refund even when it exceeds the federal tax otherwise payable.
Official sources
Multigenerational home renovation tax creditWho can claim the Multigenerational home renovation tax creditExpenses you can claim for the Multigenerational home renovation tax creditHow to claim the Multigenerational home renovation tax creditSchedule 12 - Multigenerational Home Renovation Tax CreditDisability-Related Information 2025CRA Service Standards 2026-2027Related procedures
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