Schedule 12: Multigenerational Home Renovation Tax Credit (MHRTC)

The Multigenerational Home Renovation Tax Credit (MHRTC) is a new refundable tax credit you can claim on your tax return starting in 2023.

An eligible individual can claim this credit for renovation expenses to create a secondary unit. The secondary unit must have a senior or adult eligible for the disability tax credit living in the home. To find out if you are eligible, see the guidelines in the sections below or the checklist, Who can claim MHRTC?.

The following conditions must all apply, along with ones found under Is my dwelling eligible?

  • Any person claiming the credit must be an eligible individual.
  • One person living in the existing home or the new secondary unit must be a qualifying individual.
  • There is only MHRTC claim for the qualifying individual. Only one renovation can be claimed during their lifetime.

The following are key terms for the bolded words above.

Term Definition
Eligible individual

An eligible individual is a resident of Canada from January 1 to December 31 of the year they are making the claim, who either:

  • Lives or intends to live in the home within 12 months of the end of the renovation period. This can be the:
    • Qualifying individual
    • The spouse or common-law partner living with the qualifying individual at any time in the renovation period tax year
    • A qualifying relation of the qualifying individual
Qualifying relation

A qualifying relation is a person at the end of the renovation period who is either:

  • 18 years of age or older
  • A parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual (or the qualifying individual’s cohabiting spouse or common-law partner)
Qualifying individual

A qualifying individual is a person at the end of the renovation period who is either:

  • 65 years of age or older
  • 18 to 64 years old and eligible for the disability tax credit (DTC)

The following conditions must all apply, along with ones found under Am I eligible?

  • You had renovation costs when creating a secondary unit within the eligible dwelling (home) or property.

  • The renovation was completed in the tax year you are making the claim, regardless of when the renovation started.

  • The renovated dwelling (eligible dwelling) is all the following:

    • In Canada
    • Owned by (both or not) the qualifying individual or a qualifying relation of that individual at any time during the renovation period tax year (A trust can own it if either is a beneficiary of the trust.)
    • Lived in by both the qualifying individual and a qualifying relation of that individual, within 12 months after the end of the renovation period

The following are key terms for the bolded words above.

Term Definition
Secondary unit

Secondary unit is a self-contained housing unit that:

  • Has a private entrance, kitchen, bathroom, and sleeping area.
  • Is newly constructed or created from an existing living space that did not meet the local requirements to be a secondary unit.
  • Meets applicable local requirements, permits, and by-laws.
Eligible dwelling

Eligible dwelling is a home in Canada that is:

  • Where both the qualifying individual and qualifying relation mostly or intends to reside in, within 12 months of the end of the renovation.
  • Owned by the:
    • qualifying individual or qualifying relation
    • or both the qualifying individual and qualifying relation
Renovation period

Renovation period:

  • Begins at the time the first qualifying expense is made or incurred by the qualifying renovation.
    • For example, when applying for a building permit.
  • Ends at the time of completion of the qualifying renovation.
    • For example, when the qualifying renovation passes the final inspection or proof of project completion is received.
Renovation period tax year

Renovation period tax year is the tax year that includes the end of the renovation period of the qualifying renovation.

For example, if the renovation period ends on May 3, 2024, the renovation period tax year is 2024 even if the renovations started in 2023.

An eligible individual can claim up to $50,000 in qualifying expenses for every qualifying renovation that is completed during the tax year. The MHRTC is 15% of whichever amount is less:

  • $50,000
  • Your total qualifying expense

The maximum credit that can be claimed is $7,500.

The following are key terms for the bolded words above.

Term Definition
Qualifying expense

Qualifying expense is an expense that is:

  • reasonable and directly affects the qualifying renovation of an eligible dwelling
  • Paid or incurred after December 31, 2022, and before the end of the renovation period by an eligible individual
Qualifying renovation

Eligible dwelling is a home in Canada that is:

  • Where both the qualifying individual and qualifying relation mostly or intends to reside in, within 12 months of the end of the renovation.
  • Owned by the:
    • qualifying individual or qualifying relation
    • or both the qualifying individual and qualifying relation

Bennett's aunt, Lucy, recently turned 65 years old and can’t take care of a large home anymore. Bennett’s local laws allow for 2 housing units on Bennett’s property, so Bennett decides to build a small separate house for Lucy to live on the property. The new house will have a small bedroom, kitchen, and bathroom. Bennett starts the renovation in April 2023.

The new house is completed and ready for Lucy to move in by October 2024. However, it takes Lucy longer than expected to sell their old home and so Lucy doesn't move in the new house until April 2025.

Assuming Bennett has eligible expenses relating to this renovation that were not reimbursed or claimed, Bennett will be eligible to claim the MHRTC on their 2024 tax return because:

  • The renovation was completed in 2024.
  • The new unit meets all the necessary requirements to qualify as a secondary unit.
  • Lucy is a qualifying individual who is 65 years of age or older at the end of the tax year Bennett is making the claim for.
  • Lucy will be sharing the dwelling with Lucy’s nephew Bennett (qualifying relation).
  • Lucy intends to occupy the secondary unit within 12 months of its completion.

Marvin's father recently died and their mother, Vivi, now needs live-in care. Marvin decides to convert their sunroom into a bedroom with an ensuite bathroom so that Vivi can move in. There is a separate entrance to the sunroom from the back of the house, however Marvin does not add a kitchen to the space because Vivi will not be cooking.

Marvin cannot claim the MHRTC for this renovation because the new renovations do not qualify as a secondary unit. To qualify, a secondary unit must have a separate entrance, bedroom, bathroom, and kitchen.

For more examples, see the section Examples of situations that do and do not qualify, on the Who can claim (CRA).

Follow these steps in H&R Block's 2024 tax software:

  1. On the left navigation menu, under the Credits & deductions tab, click Other.

  1. Under the OTHER SITUATIONS heading, select the checkbox labelled Multigenerational Home Renovation Tax Credit (Schedule 12) and click Continue.
  2. When you arrive at the Multigenerational Home Renovation Tax Credit (Schedule 12) page, enter your information into the tax software.

More information can be found on the following pages: