Multigenerational Home Renovation Tax Credit: Up to $7,000 Back on a Family Suite
If you build a self-contained suite so a parent 65 or older, or an adult family member eligible for the disability tax credit, can live with you, the federal government gives some of it back. It’s 15% of up to $50,000 in most articles, but the rate follows the lowest federal tax rate: 14.5% for suites finished in 2025 and 14% from 2026, so the most you get now is $7,000.
At a glance
The year the renovation is finished sets the rate, not the year it started.
The Multigenerational Home Renovation Tax Credit (MHRTC) is a refundable federal credit on up to $50,000 of costs to build a self-contained secondary unit so a family member who is 65+ or eligible for the disability tax credit can live with a relative. For suites completed in 2026 the rate is 14%, so the maximum is $7,000. A detached garden suite can qualify where local rules allow one.
Seven Thousand Dollars on a Three-Hundred-Thousand-Dollar Job
Let’s be honest about the size of this. A full garden suite in Ontario typically costs well into six figures. This credit tops out at $7,000 for anything finished in 2026. It won’t decide whether you build. It will pay for the appliances you’re not allowed to claim, with change left over for the moving truck. For help filing, see how to claim the credit, step by step.
It is still worth getting right, because it’s refundable. You get it even if you owe no tax, which matters when the person claiming is a retired parent on a pension. And you only get one per family member per lifetime, so a claim filed wrong is not easily redone.
Most articles still say 15% and $7,500. That was true for 2023 and 2024. The credit is calculated at the lowest federal tax rate, which the Department of Finance cut to 14.5% for the 2025 year and 14% for 2026 and later. CRA’s MHRTC page shows 14.5% and a $7,250 maximum for 2025.
Four Tests, All of Them Must Pass
CRA uses its own vocabulary here. These are its tests in plain English, from the CRA rules page.
1. The person the suite is for
CRA calls them the “qualifying individual”. They must be 65 or older by the end of the year the renovation finishes, or 18 or older and eligible for the disability tax credit.
2. The relative they live with
The “qualifying relation” is 18 or older and is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or of their spouse or common-law partner.
3. The home
Owned by either of them (or a trust where one is a beneficiary), in Canada, and both ordinarily live there or intend to within 12 months after the work is finished. Land is normally limited to about half a hectare unless more is needed to use the home, for example because of a municipal minimum lot size.
4. The suite
A self-contained secondary unit with a private entrance, kitchen, bathroom and sleeping area, newly built or created from space that didn’t already meet local rules. It must meet local requirements, and the work must be enduring and integral to the home.
Who actually claims: the qualifying individual, their spouse or partner, or the qualifying relation, if they live (or will live) in the home within 12 months of completion; or a qualifying relation who owns the home. More than one person can claim, but the total for one renovation can’t exceed $50,000 of costs. If you can’t agree on the split, CRA can decide it for you, which is a family dinner you don’t want.
Does a Detached Garden Suite Count?
Yes, with conditions. CRA’s general pages talk about renovations and secondary units without mentioning backyard buildings. But in technical interpretation 2023-0960671E5, CRA was asked about a detached carriage house or laneway house and answered: “Yes, provided that all the conditions to qualify for the MGHRTC are met.”
Two conditions do the work. The detached unit has to be allowed as a secondary unit under local rules, and it has to be built on land that forms part of the eligible dwelling. In Ontario, the first is usually easy on an urban serviced lot, because the Planning Act now allows one unit in a building ancillary to the house. On a rural lot it depends on your township’s zoning.
A technical interpretation is CRA’s opinion on the facts it was given, not a ruling on your file. Keep your building permit, final inspection and the zoning approval with your receipts. That’s your proof the unit “meets local requirements”.
Grey zone: temporary garden suites. In many townships a “garden suite” is a portable unit allowed for up to 20 years under a temporary use by-law, with a removal agreement. CRA wants work that is “enduring” and “integral” to the dwelling. We haven’t found CRA guidance on a portable, removable unit. Get tax advice before counting this credit for one. See temporary garden suites.
The Receipts That Count, and the Ones That Don’t
| Usually counts | Does not count |
|---|---|
| Contractor and trade invoices (electrician, plumber, carpenter, architect or designer) | Household appliances (fridge, stove, washer, dryer) |
| Building materials and fixtures, including for do-it-yourself work | Your own labour and your own tools |
| Permit fees and plans | Financing costs and interest |
| Equipment rental (excavator, lift) | Routine repairs, maintenance, gardening, housekeeping, security monitoring |
| Work by a relative if they are registered for GST/HST | Work by a non-arm’s-length person who is not GST/HST registered |
| TVs and home entertainment electronics | |
| Anything already claimed under the medical expense or home accessibility credits | |
| Amounts reimbursed, and anything without a receipt |
Last checked October 2026 · Source: CRA: Multigenerational Home Renovation Tax Credit
One rule people miss: CRA reduces your qualifying costs by any reimbursement or assistance you receive or are entitled to, including GST/HST rebates. On a full garden suite that rarely matters, because your costs blow past $50,000 anyway. On a small conversion it can cost you real money. See the second example below.
CRA also wants proper receipts: the vendor’s name, business address and GST/HST number, what was done, the dates, the work address, the amount, and proof of payment. A cash deal with no paperwork is a $0 claim.
Three Families, Three Different Numbers
Made-up households, real rules. All amounts include HST paid. Rates are for renovations finished in 2026.
A: Garden suite for a parent
A 72-year-old moves into a new one-bedroom garden suite on her son’s urban lot. Total cost $310,000, of which $7,000 is appliances. Finished June 2026.
Eligible costs: $303,000, capped at $50,000.
Credit: $50,000 × 14% = $7,000, refundable.
If they’d finished in December 2025, it would have been $7,250. That’s the price of one late window delivery.
B: Small attached conversion
An attached garage becomes a self-contained studio for an adult daughter who is eligible for the disability tax credit. Contractor costs $46,000, and a $5,000 rebate from a local program.
Eligible costs: $46,000 − $5,000 = $41,000.
Credit: $41,000 × 14% = $5,740.
Here the rebate does reduce the credit, because the job is under the $50,000 cap.
C: Two claimants, one suite
A 68-year-old and her daughter co-own the property and both paid for the suite. Costs $180,000.
Total claim across both of them: still $50,000 of costs. They split it, say $25,000 each, for $3,500 each ($7,000 total).
Splitting doesn’t double it. It just puts the refund where the tax return can use it.
The credit is the easy part. The lot is the hard part.
Before you plan around $7,000, make sure the suite can be built where you want it. Our $399 + HST lot report checks zoning, size, setbacks, servicing and fire access in 48 hours, credited toward plans or a build.
Filing It Without Drama
Pick the right tax year
Claim in the year the renovation is completed. CRA’s own example: work started in 2023 and finished May 3, 2024 is claimed on the 2024 return. Your final inspection date is a sensible marker; check with your preparer.
Use line 45355
The credit goes on line 45355 of the T1 return. CRA’s tax tip says to use Schedule 12 to calculate it.
Decide who claims and how it splits
Before filing, agree in writing who claims what. The total across everyone can’t pass $50,000 of costs for that renovation.
Keep the file
Invoices with GST/HST numbers, proof of payment, delivery slips, the building permit and final inspection, and a note of when the family member moved in. CRA can ask for it later.
Don’t double-dip
An expense claimed here can’t also go under the Home Accessibility Tax Credit or the medical expense credit. Separate work, such as a later stairlift, can go under the other credit. See accessible design.
Six Ways to Lose the Credit
- Building an unpermitted unit. “Meets local requirements” is part of the test. An illegal suite is a bad claim and a worse insurance problem.
- Leaving out the kitchen or private entrance. A bedroom and ensuite added to the house is not a self-contained secondary unit.
- Paying cash to a cousin. Work from a non-arm’s-length person only counts if they’re GST/HST registered, and no receipt means no claim.
- Assuming the parent has to own the house. They don’t. A qualifying relation who owns it can claim. But someone in the household has to own it.
- Claiming for a rental. The suite has to be for the qualifying individual or a qualifying relation to live in. Building it to rent to a stranger doesn’t fit, and raises HST questions of its own. See HST on a garden suite.
- Using the 15% number in your budget. For a suite finished in 2026, budget $7,000, not $7,500.
This page explains the rules as CRA publishes them. It is not tax advice. Check your situation with a tax professional, and see our funding directory for grants and loans that may stack with it, including the Simcoe County program, which has its own rental conditions.
Building for family? Start with what the lot allows.
The credit only works if the suite is legal. Our $399 + HST lot report tells you what you can build, how big, and what it’ll take to service, in 48 hours. Credited toward permit plans or a build.
The Multigenerational Credit, Answered
How much is the multigenerational home renovation tax credit?
It is calculated on up to $50,000 of qualifying costs at the lowest federal tax rate. That was 15% (up to $7,500) for renovations finished in 2023 and 2024, 14.5% (up to $7,250) for 2025, and 14% (up to $7,000) for 2026 and later. It is refundable, so you receive it even if you owe no tax.
Does a garden suite qualify for the multigenerational tax credit?
It can. In technical interpretation 2023-0960671E5, CRA said a detached carriage house or laneway house can qualify provided all conditions are met, including that local rules allow a detached secondary unit and that it is built on land forming part of the eligible dwelling. Keep your permit and final inspection as proof.
Who can claim the multigenerational home renovation tax credit?
The family member the suite is for (65+ or eligible for the disability tax credit), their spouse or partner, or a qualifying relation such as an adult child, provided they live in the home or intend to within 12 months of completion. A qualifying relation who owns the home can also claim. Several people can share one claim up to $50,000 of costs in total.
Can I claim the credit more than once?
Only one qualifying renovation can be claimed for each qualifying individual in their lifetime. If you build a suite for your mother, you cannot claim again for her later. A different qualifying individual, such as your father-in-law, could support a separate claim.
Are appliances eligible for the credit?
No. CRA excludes household appliances, home entertainment electronics, financing costs, routine maintenance, your own labour and tools, and anything without a receipt. Materials, contractor work, permits, plans and equipment rentals generally count.
Which line do I claim the credit on?
Line 45355 of your T1 income tax and benefit return, for the year the renovation was completed. CRA says to use Schedule 12 to calculate the amount.
Do grants reduce the multigenerational tax credit?
They reduce your qualifying costs. CRA requires you to subtract reimbursements and assistance, including GST/HST rebates. On a full garden suite costing far more than $50,000, this usually does not change the credit. On a smaller project under $50,000, it does.
Can I claim the multigenerational credit and the home accessibility credit?
Yes, but not for the same expense. CRA does not allow one expense under both the Multigenerational Home Renovation Tax Credit and the Home Accessibility Tax Credit or the medical expense credit. Different work can be claimed under each.