How does the multigenerational home renovation tax credit work, and how much is it worth for 2026?
For 2026, the multigenerational home renovation tax credit is a refundable credit of 14% on up to $50,000 of costs, so it tops out at $7,000. It covers a self contained secondary unit that lets a senior 65 or older, or an adult eligible for the disability tax credit, live with a relative. It was 14.5% ($7,250) for 2025.
What is the credit worth for 2026, and what was it before?
The credit is the appropriate percentage for the year times the lesser of $50,000 and your client's qualifying expenditures, and it's deemed paid on account of tax, which makes it refundable (ITA 122.92(3)) laws-lois.justice.gc.ca. The appropriate percentage is the lowest federal rate, so the credit moved when that rate fell.
| Tax year the renovation ends | Rate | Maximum credit on $50,000 |
|---|---|---|
| 2023 and 2024 | 15% | $7,500 |
| 2025 | 14.5% | $7,250 |
| 2026 | 14% | $7,000 |
The 15% and $7,500 figures come from the original Budget 2022 measure, which started with expenditures made after December 31, 2022 canada.ca. For 2025 the CRA applies 14.5%, up to $7,250 per claim
canada.ca. The lowest federal rate for 2026 is 14%
canada.ca.
As of October 2026 the CRA line 45355 page and Schedule 12 still show the 2025 figures. The $7,000 for 2026 comes from applying the formula to the 14% rate; the CRA has not printed it on a 2026 form yet. Many older explainers still quote $7,500, which is wrong for any renovation finishing after 2024.
Who has to live in the unit, and who can claim?
Three people matter, and they're often different people. The CRA defines each one, and your client must also be resident in Canada from January 1 to December 31 of the claim year canada.ca.
| Role | Who it can be | The test |
|---|---|---|
| Qualifying individual | The person the unit is for | 65 or older at the end of the year the renovation ends, or 18 or older and eligible for the disability tax credit that year |
| Qualifying relation | The relative they live with | 18 or older, and a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or their spouse or common law partner |
| Eligible individual (the claimant) | Whoever paid the costs | Lives or intends to live in the dwelling within 12 months after the work ends as the qualifying individual, their spouse or a qualifying relation, or owns the dwelling and is a qualifying relation |
The dwelling must be in Canada and owned, alone or jointly, by the qualifying individual or a qualifying relation at some point in the year the renovation ends. Both of them must live there, or be expected to, within 12 months after it ends canada.ca. For the disability route, see the rules on the disability tax credit.
Two cases fail often. A caregiver who isn't related doesn't count as a qualifying relation, and an adult child with no disability tax credit eligibility isn't a qualifying individual canada.ca.
A bedroom is not enough: the work has to create a secondary unit
The secondary unit is a self contained housing unit with a private entrance, kitchen, bathroom and sleeping area that meets any local requirements, and the renovation must be of an enduring nature and integral to the dwelling (ITA 122.92(1)) laws-lois.justice.gc.ca.
It can be newly built or converted from existing space that didn't already meet the local rules for a secondary unit, and it can be a separate structure on the same land. A spare room converted for a parent, with no kitchen, doesn't qualify. The land counted is usually limited to half a hectare (1.24 acres) canada.ca.
Get the permits. The unit has to meet local permits, codes and bylaws, so an unpermitted basement suite puts the whole claim at risk canada.ca.
Which costs qualify, and which ones get stripped out?
Qualifying costs are goods and services for the renovation (including professionals), required permits and equipment rental. If your client does the work personally, materials, fixtures, equipment rentals, building plans and permits count, but the value of their own labour and tools doesn't canada.ca.
These don't qualify: routine repair or maintenance, household appliances, home entertainment electronics, housekeeping, security monitoring, gardening or outdoor maintenance services, financing costs, amounts reimbursed, amounts with no receipt, and anything already claimed under the medical expense credit or the home accessibility tax credit canada.ca.
The relative trap: goods or services from a person not dealing at arm's length with your client don't count unless that person is registered for GST/HST canada.ca. Schedule 12 takes amounts paid including tax, then subtracts reimbursements and government assistance
canada.ca, and the CRA says to reduce expenses by related GST/HST rebates
canada.ca.
A $62,600 basement suite finished in March 2026 earns $7,000
Margaret is 74. Her daughter Priya owns the house and pays for a basement suite with its own entrance, kitchen and bathroom. The permit application went in during September 2025 and the final inspection passed in March 2026, so the claim goes on Priya's 2026 return. Margaret's son, who isn't registered for GST/HST, did the tile work.
| Item | Amount paid | Counts? |
|---|---|---|
| Contractor labour and materials | $52,000 | Yes |
| Permits and drawings | $2,400 | Yes |
| Fridge and range | $3,800 | No (household appliances) |
| Line of credit interest | $1,900 | No (financing cost) |
| Tile work by Margaret's son | $2,500 | No (related, not GST/HST registered) |
| Total paid | $62,600 | |
| Qualifying expenditures | $54,400 | |
| Capped at | $50,000 | |
| Credit at 14% | $7,000 |
Priya owes $1,500 of tax before the credit. The $7,000 clears that balance and the other $5,500 comes back as a refund, because the credit is refundable. Had the suite been finished in December 2025, the same $50,000 would have earned $7,250 at 14.5%.
When is it claimed, and how do two claimants split it?
The renovation period starts with the first qualifying expenditure (a permit application, for example) and ends when the work is complete (the final inspection, for example). Your client claims in the tax year the period ends, even when the work started a year earlier canada.ca. The relative can move in the following year: CRA's own example has a renovation finished in 2026, claimed on the 2026 return, with the aunt it was built for moving in during 2027
canada.ca.
Only one qualifying renovation can ever be claimed for a qualifying individual, by all taxpayers combined, and the $50,000 cap applies across everyone claiming for that renovation (ITA 122.92(4)) laws-lois.justice.gc.ca. The cap stays at $50,000 even when two qualifying individuals will live in the unit
canada.ca.
Joint payers can split the $50,000 any way they agree, as long as each claims only what they paid. If they can't agree, the Minister may set the portions (ITA 122.92(4)) laws-lois.justice.gc.ca. Report the costs on Schedule 12 and the credit on line 45355
canada.ca.
Sources
Can parents claim it for a suite built for their adult child?
Only if the adult child is 18 or older and eligible for the disability tax credit. An adult child without that eligibility isn't a qualifying individual, so the suite doesn't qualify canada.ca.
Can the same expense also go on the home accessibility credit?
No. An expense already claimed under the home accessibility tax credit or the medical expense credit can't be claimed for this credit, and the CRA says the same expense can't go on more than one credit canada.ca. Different expenses on the same project can go to different credits.
Does the person claiming have to live in the home?
No, if they own the dwelling and are a qualifying relation, such as a son who owns the house his mother will live in with his sister. Otherwise the claimant must live there, or intend to, within 12 months after the renovation ends canada.ca.
Can one person claim two renovations in the same year?
Yes, if they're for two different qualifying individuals. Each renovation gets its own $50,000 cap, and the expenses can't be pooled: the CRA example pairs a $15,000 renovation with a $63,000 one. The second is capped at $50,000, so the credit is $2,175 plus $7,250, or $9,425, at the 2025 rate canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.