Hey Hustlers! Looking to create a secondary suite for elderly parents or disabled family members? The Multigenerational Home Renovation Tax Credit (MHRTC) could put up to $7,500 back in your pocket for qualified renovations in 2025.
This refundable tax credit helps Canadian families build separate living spaces, making multigenerational living more affordable and accessible. At HustleHub, we’ve fact-checked all the requirements so you know exactly what qualifies and how to claim this valuable benefit.
🟦 KEY TAKEAWAY BOX
| MHRTC 2025 Details | Facts |
| Maximum Credit | $7,500 (15% of up to $50,000 in expenses) |
| Credit Type | Refundable – get money even if you owe no tax |
| Program Name | Multigenerational Home Renovation Tax Credit |
| Qualifying Person | Age 65+ OR eligible for Disability Tax Credit |
| Required Addition | Complete secondary dwelling unit |
| Application | File with your 2025 tax return |
What is the Multigenerational Home Renovation Tax Credit?
The MHRTC eligibility requirements are specific – this isn’t for general home improvements. You must create a complete secondary dwelling unit for a qualifying family member who is either:
- 65 years or older by December 31, 2025
- Eligible for the Disability Tax Credit (DTC)
The renovation must result in a self-contained living space with its own entrance, kitchen, bathroom, and sleeping area.
MHRTC Eligibility Requirements 2025
Qualifying Person Requirements:
| Criteria | Details |
| Age Requirement | 65+ by end of tax year OR DTC eligible |
| Relationship | You, spouse, or eligible relative |
| Occupancy | Must live there or intend to within 12 months |
Property Requirements:
- Location: Must be in Canada
- Ownership: Owned by you or qualifying person
- Type: Your principal residence or qualifying person’s residence
- Zoning: Must comply with local building codes
Renovation Requirements:
The secondary unit must include ALL of these:
- Private entrance (separate from main dwelling)
- Kitchen facilities (sink, cooking surface, food storage)
- Bathroom (toilet, sink, bathing facility)
- Sleeping area
- Living area
Eligible vs Non-Eligible Expenses
✅ Qualifying Expenses (Up to $50,000):
- Construction materials and supplies
- Contractor labor costs
- Architect and designer fees
- Equipment rental for construction
- Permit and inspection fees
- Professional installation costs
❌ Non-Eligible Expenses:
- Furniture and appliances
- Regular maintenance and repairs
- Landscaping and outdoor work
- Financing costs and interest
- Work done by family members (unpaid)
- Expenses reimbursed by others
How Much Can You Actually Claim?
The $7500 renovation tax credit Canada calculation is straightforward:
Credit = 15% of eligible expenses (maximum $50,000)
Real Examples:
- $20,000 renovation: 15% = $3,000 credit
- $35,000 renovation: 15% = $5,250 credit
- $50,000+ renovation: 15% = $7,500 maximum credit
Important: This is a refundable credit, meaning you get the money even if you owe no income tax.
Step-by-Step Claiming Process
Before Starting Renovations:
- Verify eligibility – Confirm qualifying person meets age/DTC requirements
- Check local bylaws – Ensure secondary suites are permitted
- Get quotes – Plan renovations within the $50,000 expense limit
- Obtain permits – Required for most structural changes
During Renovations:
- Save all receipts and invoices
- Document progress with photos
- Keep contractor agreements and payment records
- Track eligible vs non-eligible expenses separately
When Filing Your 2025 Tax Return:
- Complete Form T1-AD (MHRTC calculation form)
- Report on Line 45350 of your tax return
- Submit supporting documents if requested by CRA
- Claim the credit – refund processed with your return
Common MHRTC Mistakes to Avoid
❌ Application Errors:
- Starting work before confirming eligibility
- Including appliances in expense calculations
- Missing required elements (kitchen, bathroom, entrance)
- Exceeding income limits (there are none for MHRTC)
- Claiming ineligible relationships (cousins, friends don’t qualify)
✅ Success Tips:
- Hire licensed contractors for complex work
- Keep detailed expense records throughout the project
- Ensure code compliance before claiming
- Understand refundable nature – you can get money back
Who Qualifies as an Eligible Relative?
The multigenerational housing tax benefit extends to these family relationships:
Direct Relationships:
- Your parent, grandparent, child, grandchild
- Spouse’s parent, grandparent, child, grandchild
- Your or spouse’s brother, sister, aunt, uncle
Important: The qualifying person must meet the age (65+) or disability (DTC) requirements.
Timeline and Payment Expectations
Renovation Timing:
- Work must be completed in 2025 to claim on 2025 tax return
- No partial year claims – full project must be finished
Credit Payment:
- Claimed when filing 2025 tax return (due April 2026)
- Refund processed with regular tax return processing
- Direct deposit recommended for faster payment
Maximize Your MHRTC Benefit
Strategic Planning:
- Time renovations to complete within one tax year
- Focus spending on the most expensive qualifying items first
- Coordinate with other credits – MHRTC doesn’t reduce other benefits
- Plan for $50,000 cap – prioritize essential vs nice-to-have features
Documentation Best Practices:
- Separate invoices for eligible vs non-eligible work
- Photo documentation of before/after conditions
- Keep digital copies of all receipts and contracts
- Track project timeline for CRA verification if needed
Bottom Line for Hustlers: The Multigenerational Home Renovation Tax Credit 2025 facts are clear – up to $7,500 back for creating proper secondary living spaces for qualifying family members. Focus on meeting all requirements and keeping detailed records to maximize your refund.
Smart renovations can strengthen family bonds AND your bank account!
