Multigenerational Home Renovation Tax Credit

The "Multigenerational Home Renovation Tax Credit" was introduced by the Department of Finance Canada in Budget 2022 and implemented by the Canada Revenue Agency. This policy, effective from January 1, 2023, operates at the national level and targets adults with disabilities who qualify for the Disability Tax Credit (18 years and older) and individuals aged 65 and over. It aims to support multigenerational living by providing financial assistance for home renovations that establish a secondary dwelling unit for eligible persons to live with a qualifying relation. Key measures include a refundable 15% tax credit on up to $50,000 of eligible renovation expenses, which can be claimed once per eligible person over their lifetime. Eligible renovations must be made to the principal residence of the qualifying individual and can be claimed by the eligible person, their spouse or common-law partner, and a qualifying relation who owns the dwelling. Qualifying relations include family members such as parents, grandparents, children, siblings, aunts, uncles, nephews, and nieces. Although data is not yet available due to the measure’s recent implementation, it is projected to cost approximately $25 million CAD for the 2023 tax year.