Tax credit for multi-generational renovations now availableCanadian Contractor multi generational home renovation tax credit renovations tax credit
Canadians can now access a 15 per cent tax refund on expenses related to home renovations for elderly family members or adults with disabilities.
The federal government’s Multigenerational Home Renovation Tax Credit took effect January 1. The credit provides Canadians with a 15 per cent refund for renovations aimed at helping to care for elderly and disabled relatives in their homes.
Eligible projects include the construction of a secondary suite for a family member who is senior or an adult with a disability. The credit can be applied against expenses of up to $50,000, for a maximum refund of $7,500.
Canada’s Budget 2022 outlines eligible persons, qualifying relations and eligible claimants for the tax credit. Seniors 65 years of age or older and adults with disabilities who are 18 years of age or older are considered eligible.
As outlined in Federal Bill C-32, related adults can include a grandparent, parent, child, grandchild, sibling, aunt, uncle, niece or nephew. The secondary suite must also be a self-contained housing unit that includes a separate entrance, bathroom, kitchen and sleeping area. The home being renovated must also be lived in within 12 months after the end of the renovations.
The credit was included in the federal government’s new housing affordability measure outlined last year. Other items in the government’s “Making Housing More Affordable” measures include the two-year ban on foreign purchases of Canadian houses and a one-per-cent annual vacant home tax on foreign-owned underused housing.