Given Canada’s current housing crisis, it shouldn’t come as a surprise that people are looking for creative ways to reduce the cost of owning a home. For some, this includes having multiple generations under the same roof.
Understanding that multigenerational homes are a viable option for many, the government is introducing the Multi Generational Home Renovation Tax Credit.
As the name suggests, the Multi Generational Home Renovation Tax Credit is a tax credit available to taxpayers who renovate their homes to accommodate multiple generations of family members. More specifically, it will allow taxpayers to add an additional living space to their home so that an elderly or disabled adult relative can move in with them.
This living area can be in the form of a “granny flat”, which is a self-contained unit in a separate building on the same property. It can also be an addition added onto your home or the creation of a secondary living space within an existing dwelling.
The only requirements, regarding the self-contained living area, are that it must have a:
- Private entrance
- Sleeping area
As these types of renovations and projects can add up quickly, the government is offering a 15% refundable tax credit on up to $50,000 worth of eligible expenses. This will result in a maximum tax credit of $7,500. If any amount of credit remains after your tax owing is equal to $0, it will be refunded back to you.
Eligible expenses will include:
- Labour and professional services
- Building materials
- Equipment rentals
The Multi Generational Home Renovation Tax Credit will be available starting in 2023 and can be claimed for the tax year in which the project passes final inspection.
For more information on the tax credit and for help planning, please contact us today.