Multigenerational Home Renovation Tax Credit (MHRTC) 2025

$7,500

Maximum refundable federal tax credit for adding a secondary suite

The Multigenerational Home Renovation Tax Credit (MHRTC) is one of the most valuable renovation-related tax credits in Canada. Introduced in the 2023 tax year and continuing in 2025, it offers a 15% refundable credit on up to $50,000 of eligible renovation expenses — a maximum of $7,500 back in your pocket — for homeowners who create a self-contained secondary suite for an eligible senior or disabled family member.

Because it's refundable, you receive the credit even if your federal tax owing is zero. That makes it accessible to retirees, lower-income households, and anyone whose income tax bill is small.

Who Qualifies for the MHRTC?

The Homeowner

You must be a Canadian resident who owns the qualifying home (or a qualifying relation who owns it). The property must be your principal residence, or the principal residence of the qualifying individual you're building the suite for.

The "Qualifying Individual" Moving Into the Suite

The person moving into the new suite must be either:

A senior aged 65 or older at the end of the tax year in which the renovation is completed, OR
A person who is eligible for the Disability Tax Credit (DTC)

The Qualifying Relation

The qualifying individual must be a qualifying relation of the homeowner (or their spouse/common-law partner). This includes: parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew.

What Counts as an Eligible Secondary Suite?

The renovation must create a self-contained secondary dwelling unit within or attached to the qualifying home. To count, the suite must have:

Its own private entrance (not requiring passage through the main unit)
A kitchen with cooking facilities
A bathroom
A sleeping area

The qualifying individual must occupy the suite as their principal residence within 12 months of the renovation completion.

What Expenses Are Eligible?

Eligible	Not Eligible
Construction labour and materials	Financing costs (interest on loans)
Permits and professional fees (architects, engineers)	Furniture and appliances
Plumbing, electrical, HVAC for the suite	Routine maintenance
Flooring, drywall, insulation	Tools and equipment purchased
Kitchen and bathroom installations	Work done by the homeowner themselves
Separate entrance construction	Expenses already claimed for HATC

Important: The $50,000 expense limit is a lifetime cap per qualifying renovation — not per year. If you spend $30,000 now and $20,000 more later on the same suite, the combined $50,000 would exhaust the credit. You cannot claim MHRTC for the same expenses claimed under the HATC.

How to Claim the MHRTC

Complete the renovation and ensure the suite meets all self-contained dwelling requirements before year-end.

Collect all receipts — contractor invoices, material receipts, permit fees. CRA requires documentation showing the contractor's name, address, and GST/HST number.

Confirm the qualifying individual moves in within 12 months of renovation completion.

File your T1 return and complete Schedule 12 (Home Accessibility Expenses). The MHRTC has its own section on this schedule.

Receive your refundable credit — if your tax owing is less than $7,500, you'll receive the difference as a refund.

MHRTC Examples

Renovation Cost	Eligible Amount	Credit (15%)
$25,000 basement suite	$25,000	$3,750
$48,000 garage conversion	$48,000	$7,200
$60,000 addition	$50,000 (cap)	$7,500
$15,000 basement apartment	$15,000	$2,250

Combining MHRTC with Other Programs

The MHRTC can be combined with several other programs for maximum value:

HATC: If the suite includes accessibility features for the qualifying individual, those costs may separately qualify for the HATC (15% on up to $20,000) — as long as the same expenses aren't claimed for both.
Ontario Seniors' Home Safety Tax Credit: Ontario residents can stack the provincial 25% credit on accessibility-related expenses alongside the MHRTC.
Canada Greener Homes Loan: If the new suite includes energy upgrades (insulation, heat pump), the 0% interest loan can cover those costs.

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Frequently Asked Questions

Can I claim the MHRTC for a rental suite?

No. The suite must be for a qualifying individual (senior 65+ or DTC-eligible person) who is a family member. A commercial rental arrangement does not qualify, even if the tenant happens to be a senior.

What if the qualifying individual moves out within a year?

CRA requires the qualifying individual to move in within 12 months of renovation completion. There is no stated requirement for how long they must remain. However, if the arrangement appears non-genuine, CRA may deny the claim. Keep documentation showing the person established the suite as their principal residence.

Can two family members split the $50,000 limit?

If multiple qualifying persons share a dwelling unit, you can only claim the credit once per qualifying renovation. However, if you build two separate qualifying suites (one for each family member), you may be able to claim the credit for each renovation separately, subject to CRA guidelines.