Canadian families looking to make renovations to accommodate aging parents or disabled relatives can now receive great financial support from the government through the Multigenerational Home Renovation Tax Credit (MHRTC). This federal program, funded through the Canada Revenue Agency, provides households with a limited but generous reno subsidy of up to $7500 (MHRTC 2023), through refundable tax credits, for eligible renovations done in 2025.
Understanding the $7500 Credit Program
The tax refund offers a 15% tax credit for renovations up to $50,000, which translates to a max benefit of $7500-per individual under the MHRTC (2023). This refundable credit can help families accommodate parents or in-laws while maintaining a degree of independence for the renovated dwelling. This refund is particularly generous to families as it does not give them a deduction but a precise refund.
Eligibility Criteria and Eligible Persons
To access this federal benefit, families need to satisfy specific criteria set forth by the CRA. The qualifying individual must either be a Canadian senior who is 65 years old or older by the end of the year we are considering renovations, or an individual aged 18 to 64 years who is a holder of the Disability Tax Credit (DTC).
Other requirements are Canadian citizenship and residency, owning a home, updated tax returns, and completion of renovations in the tax year of the claim. The qualifying individual has to occupy the renovated area within a year after the completion of the renovations, and there is a lifetime limit of a single claim per eligible person.
Permissible Renovation Costs and Restrictions
This program addresses a wide category of expenses necessary for the renovations, aimed at making the living area accessible. These expenses are the contractor’s fees, construction materials, equipment rentals, necessary permits, and architectural work including the installation of ramps and grab bars for the accessible equipment. In addition to the general contractor’s fees, the program covers labor costs for licensed plumbers and electricians.
| Program Feature | Details |
|---|---|
| Maximum Credit | $7,500 per qualifying individual |
| Credit Percentage | 15% of eligible expenses |
| Expense Limit | Up to $50,000 in qualifying costs |
| Claims Allowed | One per qualifying individual (lifetime) |
Family applications are pooled for CRA processing, which undergoes identity verification from four to eight weeks. Upon approval, funds are issued to the family and are received between two to four weeks for direct deposit which immediately alleviates tax burden for renovation costs. While direct deposit is issued per family unit, ownership and joint filing is pooled, therefore multiple owners of the same property can split the claim but the total reimbursement is capped at 50k.
