CRA Offering $7,500 Home Renovation Credit: Thinking about upgrading your home to support a family member? The Canada Revenue Agency (CRA) has some exciting and timely news: beginning April 2025, eligible Canadian homeowners can access up to $7,500 in tax relief through the Multigenerational Home Renovation Tax Credit (MHRTC). This refundable credit is a strategic move to make caregiving more affordable and practical for families who want to support aging parents or loved ones with disabilities at home.
The MHRTC provides real financial support to help cover the costs of building a self-contained secondary unit for a qualifying individual. Whether you’re renovating a basement, garage, or part of your main floor, this credit could significantly reduce your out-of-pocket renovation expenses.
Let’s explore exactly what this credit is all about, who can benefit from it, and how you can successfully claim it — whether you’re a homeowner, a caregiver, or a professional in the construction or financial planning industry.
CRA Offering $7,500 Home Renovation Credit
| Feature | Details |
|---|---|
| Credit Name | Multigenerational Home Renovation Tax Credit (MHRTC) |
| Amount | 15% of eligible expenses, up to $50,000 (Max Credit: $7,500) |
| Eligibility | Canadian residents with qualifying family renovations (secondary unit for senior or disabled person) |
| Effective Date | Available for claims in April 2025 for renovations done in 2024 |
| Official Source | Canada.ca – MHRTC |
The CRA’s $7,500 Multigenerational Home Renovation Tax Credit is more than just a financial benefit — it’s a powerful tool for building stronger families, reducing housing pressure, and enabling aging and independence at home. If you’re considering a home upgrade to accommodate a loved one, this is the perfect time to plan.
By understanding eligibility, documenting your expenses, and filing your taxes accurately, you can make the most of this generous incentive. Whether you’re a homeowner, a financial advisor, or a contractor, staying informed about the MHRTC can help you make smarter, more impactful decisions. To stay updated, consult the CRA’s official MHRTC page.
What Is the $7,500 MHRTC?
The Multigenerational Home Renovation Tax Credit is a newly implemented refundable tax credit aimed at helping Canadians who choose to support family members in their homes. This credit is intended to offset some of the significant expenses involved in modifying or expanding a primary residence to include a fully self-contained suite. These renovations enable a senior (age 65 or older) or a disabled adult (18-64) who qualifies for the Disability Tax Credit (DTC) to live independently within a family home.
This program reflects a growing movement toward multigenerational living, where families are finding innovative ways to care for one another while maintaining dignity and autonomy.
Why It Matters:
Living with or near loved ones can offer emotional support and financial advantages. This tax credit not only reduces renovation costs but also strengthens families and communities. It promotes aging in place and empowers people with disabilities to live with more autonomy while staying close to support systems.
Example:
If you invest $50,000 to build a suite above your garage for your grandmother, and she moves in within 12 months of the project’s completion, you can claim 15% of the total cost — or $7,500 — on your 2024 tax return.
Who Can Claim the MHRTC?
To access the benefits of the MHRTC, you must fall under specific categories defined by the CRA:
Qualifying Individual:
- A senior (65 years or older) by the end of the renovation year.
- An adult aged 18-64 who is eligible for the Disability Tax Credit (DTC).
These individuals must ordinarily reside in the newly renovated or constructed suite within 12 months after the work is completed.
Eligible Claimant:
To claim the tax credit:
- You must be a resident of Canada throughout the entire tax year.
- You must either:
- Own the home that is being renovated.
- Or be a close relative of the qualifying individual, such as a parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew.
Eligible Property:
- The home must be located in Canada.
- It should be the principal place of residence for both the qualifying individual and the claimant.
- The home must be ordinarily inhabited by both parties within 12 months of the renovation’s completion.
What Renovations Qualify?
To be eligible under MHRTC, your renovation must result in the creation of a self-contained secondary unit that is fully private and functional. This means it must include:
- A separate, private entrance
- Its own kitchen facilities
- A bathroom with a toilet, sink, and shower or tub
- A dedicated sleeping area
Examples of Qualifying Renovations:
- Finishing a basement to add a legal suite
- Converting a garage or attic into a living space
- Adding a coach house or garden suite
Eligible Expenses:
- Materials (e.g., drywall, flooring, insulation)
- Building and design permits
- Architectural or engineering plans
- Equipment and tool rentals
- Labour costs from licensed tradespeople (electricians, plumbers, carpenters)
- Accessibility features (ramps, handrails, wider doorways)
Important: If you do the work yourself, you cannot claim your own labor or tools you already own. Only expenses related to purchased materials, hired services, and rentals qualify.
Non-Qualifying Expenses:
- Appliances (refrigerators, stoves)
- Furniture (beds, sofas)
- Routine home maintenance or landscaping not directly related to the secondary unit
CRA Offering $7,500 Home Renovation Credit Claim the MHRTC
The CRA makes it relatively straightforward to claim the MHRTC, as long as you follow the guidelines carefully.
1. Plan and Design Your Renovation
- Consult with a qualified contractor to ensure the renovation meets the requirements of a self-contained suite.
- Get multiple quotes and assess the scope of work.
2. Gather and Keep All Documentation
- Save all receipts, contracts, blueprints, invoices, and permits.
- Maintain a project file with before-and-after photos if possible.
3. Complete Your Tax Return
- Claim the MHRTC on your 2024 personal tax return, filed by April 30, 2025.
- Include the eligible amount on the designated CRA line and attach documentation if required.
4. Respond Promptly to CRA Requests
- CRA may request receipts or additional verification.
- Being organized helps you respond quickly and avoid delays.
Why This Credit Matters for Canadians
Demographic Trends:
As per Statistics Canada, over 19% of the population is now aged 65 or older, a figure expected to rise sharply by 2030. With rising health care costs and an aging population, the MHRTC promotes aging in place — a more cost-effective and compassionate solution.
Cost-Saving Benefits:
Private long-term care can exceed $30,000 annually, and assisted living costs even more. By comparison, investing in a one-time home renovation may provide lasting value and independence.
Real Estate Value:
Adding a legal suite increases property value by an estimated 8-12%, according to multiple Canadian housing analysts. It also makes homes more attractive to buyers looking for multigenerational potential or rental income.
Job Creation and Economic Stimulus:
This initiative also supports local tradespeople, electricians, designers, and small construction firms, giving a welcome boost to the economy.
FAQs On CRA Offering $7,500 Home Renovation Credit
Is this a one-time credit?
Yes, it applies per qualifying renovation. If you do another renovation for a different qualifying individual in a different year, you may be eligible again.
Can I apply the credit retroactively?
Only expenses incurred in 2024 are eligible for the April 2025 filing season. Prior renovations are not covered.
Does the secondary unit have to be separate from the main home?
Yes. It must be entirely self-contained, meaning it should operate as its own residence.
Do I have to hire professionals?
You aren’t required to hire professionals, but only paid, documented labor costs qualify. DIY work won’t be counted toward the tax credit.
What if my family member moves out shortly after?
The CRA expects the unit to be inhabited for at least 12 months. Moving out early could trigger a review or affect eligibility.
How do I prove my family member is eligible for the DTC?
Have their doctor complete the T2201 Disability Tax Credit Certificate and submit it to CRA for approval. You can check status through your CRA My Account.
