Financing and insurance
The multigenerational home renovation tax credit: who qualifies and how to claim
By Jonathan Kennedy, cabin owner and tiny home rental owner · Last reviewed November 11, 2026
For the 2025 tax year, the federal Multigenerational Home Renovation Tax Credit pays back 14.5% of your costs, capped at $50,000 of spending, when you create a home of their own for a family member: up to $7,250, and it's refundable. The person moving in has to be at least 65, or 18 or older and approved for the disability tax credit. The unit can be inside your house or a small separate house on the same lot. As of November 2026, the CRA hasn't published the 2026 rate.
Your mother is turning 70, the stairs at her place are getting harder, and you've started pricing a basement suite or a small house in the yard. Ottawa will pay back part of that bill, but only if the unit, the person and the paperwork all fit the rules.
How much is the multigenerational home renovation tax credit worth?
The credit is a percentage of what you spend, capped at $50,000 of costs per renovation:
| Tax year | Rate | Most you can get back |
|---|---|---|
| 2023 and 2024 | 15% | $7,500 |
| 2025 | 14.5% | $7,250 |
| 2026 | Not yet published by the CRA | Probably $7,000 |
Sources: CRA, CRA expenses page. The rate follows the lowest federal income tax rate, which is 14% from 2026, so we expect 14% and $7,000, but that's our arithmetic until the CRA updates its page.
It's refundable, so you get it even if you owe little tax. The CRA's own example: someone who spent $70,000 can claim $50,000, worth $7,250 for 2025; she owed $2,000 in tax, so $5,250 came back as a refund (CRA).
Who qualifies for the multigenerational home renovation tax credit?
Two people have to fit, and they have to be related (CRA):
- The person the unit is for: 65 or older by the end of the year the work finishes, or 18 or older and eligible for the disability tax credit.
- A relative living with them: an adult who is their parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew, or that relation to their spouse or common-law partner.
Cousins don't count, and neither does an unrelated live-in caregiver: the CRA's examples turn down a suite built for one (CRA examples). A suite for a healthy adult child under 65 doesn't qualify either. Whoever claims must own the home or live there, or be the person the unit is for or their relation; a family member who chips in but neither owns nor lives there can't claim their share.
Our take: check the relationship and the age before you design anything. The rules on the unit are generous; the rules on who it's for are not.
What kind of unit qualifies?
A self-contained unit with all four of: a private entrance, a kitchen, a bathroom and a sleeping area, that meets your town's rules for a second unit (CRA). Miss one and it fails. The CRA's example of a sunroom turned into a bedroom with its own bathroom and entrance, but no kitchen, doesn't qualify (CRA examples).
It doesn't have to be inside the house. The CRA's example of a homeowner who built a small separate house with a bedroom, kitchen and bathroom for his aunt on his own lot qualifies, as long as the unit is on the same land as the main home (CRA examples). That means a garden suite or other backyard unit can count, not just a basement suite.
The CRA says nothing about buying a modular or prefab unit. We'd expect a factory-built suite set on your lot to count like any other construction cost, but confirm with an accountant before you rely on it.
What expenses can you claim?
Costs to build or renovate the unit, including building permits, plans and drawings, architects' and other professionals' fees, materials, fixtures and equipment rental (CRA expenses). You can't claim:
- your own labour or tools;
- appliances and electronics;
- routine repairs and upkeep;
- financing costs;
- amounts you were reimbursed for, including rebates;
- anything bought from a relative or someone not at arm's length, unless they're registered for GST/HST;
- anything without a receipt.
An expense can't go on both this credit and the medical expense or home accessibility credit.
When and how do you claim it?
You claim on line 45355 of your return, with Schedule 12 (CRA), for the year the renovation finishes. The renovation runs from your first expense, such as applying for the building permit, to completion, such as passing final inspection. The person it's for and their relative must live there, or intend to, within 12 months after that: in the CRA's example the work finished in October 2026, the aunt moved in in April 2027, and the claim went on the 2026 return (CRA examples).
Keep the receipts; you don't send them with your return, but the CRA can ask. Several family members can split the claim, each claiming what they paid, as long as the total stays within $50,000 (CRA).
Can you claim it more than once?
Only once for each person. The CRA allows one qualifying renovation per qualifying person in their lifetime, so if a sibling already claimed a unit for your father, you can't claim another for him later (CRA examples). One household can claim for two different people in the same year, with a separate $50,000 cap for each.
Questions people ask
- How much is the multigenerational home renovation tax credit?
- For 2025 the rate is 14.5%, on at most $50,000 of spending, which caps it at $7,250. It was 15% ($7,500) for 2023 and 2024. The CRA hasn't published the 2026 rate; it follows the lowest federal tax rate, 14% from 2026.
- Does a garden suite qualify for the multigenerational home renovation tax credit?
- It can. The unit can be a small separate house on the same lot as your home, as long as it has its own door, kitchen, bathroom and bedroom space and meets your town's rules for a second unit.
- Can I claim the credit for a suite for my adult son or daughter?
- Only if they're 18 or older and eligible for the disability tax credit, or 65 or older. A suite for a healthy adult child under 65 doesn't qualify.
- Is the multigenerational home renovation tax credit refundable?
- Yes. If the credit is larger than the tax you owe, the difference comes back to you as a refund.
- Which line do I use to claim it?
- Line 45355 of your income tax return, with Schedule 12 to list the expenses. Claim it for the year the renovation is finished and keep your receipts.