Capable Group · Sources checked November 7, 2026
Short answer: if you build a self-contained suite so a parent, grandparent or another relative who is 65 or older (or an adult eligible for the disability tax credit) can live with family, the federal Multigenerational Home Renovation Tax Credit can return up to $7,000 for a renovation completed in 2026. It is 14% of up to $50,000 of eligible costs, it is refundable, and you claim it on line 45355 of the tax return for the year the work is finished.
The credit is easy to miss because it is not an application you file before construction. It is decided at tax time, from receipts. That is exactly why the decisions that make it work happen at the planning stage: the suite has to be fully self-contained, the right people have to live in the home within a year, and the paperwork has to separate eligible work from everything else.
How much is the Multigenerational Home Renovation Tax Credit?
The credit is calculated at the lowest federal personal income tax rate on up to $50,000 of qualifying expenses for one qualifying renovation.
| Renovation completed in | Rate | Expenses counted | Maximum credit |
|---|---|---|---|
| 2025 | 14.5% | Up to $50,000 | $7,250 |
| 2026 | 14% | Up to $50,000 | $7,000 |
Why two numbers? The federal government cut the lowest personal income tax rate from 15% to 14% effective July 1, 2025, which makes the full-year rate 14.5% for 2025 and 14% from 2026. CRA’s page currently shows the 2025 figures (14.5%, maximum $7,250). The 2026 maximum of $7,000 is the same formula at 14%. Check CRA’s page again when the 2026 return is released.
Because the credit is refundable, it can be paid to you even if you owe little or no tax. It is a tax credit, not a discount on the renovation price: you pay for the work, then claim the credit on your return.
Who qualifies: the senior or adult with a disability, the relative, and the person claiming
Three roles matter, and one person can fill more than one of them.
- The qualifying individual is the person the suite is for: someone 65 or older at the end of the tax year the renovation period ends, or someone 18 to 64 who is eligible for the disability tax credit at any time in that year.
- A qualifying relation is a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual, aged 18 or older at the end of the tax year of the claim.
- The person claiming (CRA calls them the eligible individual) must be a resident of Canada for the whole year and either live, or intend to live, in the home, or own it and be a qualifying relation.
The home itself must be in Canada, owned (alone or jointly) by the qualifying individual or a qualifying relation, and lived in, or reasonably expected to be lived in, by both of them. A typical GTA case: an adult daughter owns the house, her 72-year-old father moves into a new basement suite, and she claims the credit.
What the suite needs to be
This is where most claims are won or lost. CRA requires a secondary unit that:
- is self-contained, with its own private entrance, kitchen, bathroom and sleeping area;
- is newly built, or created from existing living space that did not already meet local requirements for a unit;
- meets the applicable local requirements: permits, building code and by-laws.
A finished basement with a bedroom and a bathroom is not enough. Neither is a bedroom with a kitchenette but no separate entrance. A permitted, self-contained basement suite usually checks every box, because a private entrance, kitchen, bathroom, sleeping area and code compliance are what a legal suite needs anyway. See what goes into one on our legal basement apartment page. An addition can also qualify when it creates a self-contained unit; see home additions in Toronto.
Two timing rules apply:
- The renovation must be completed in the tax year you claim, whenever it started.
- The qualifying individual and a qualifying relation must ordinarily live in the home within 12 months after the renovation period ends.
And one lifetime rule: only one renovation can be claimed for each qualifying individual.
Which costs count, and which don’t
Qualifying expenses are reasonable costs directly attributable to the qualifying renovation.
| Usually counts | Does not count |
|---|---|
| Contractor and trade work on the suite | Your own labour and tools |
| Building materials and fixtures | Household appliances |
| Equipment rentals | Electronic home-entertainment devices |
| Building plans and drawings | Routine repairs and maintenance |
| Permits | Housekeeping, security monitoring, gardening or outdoor maintenance |
| Costs that were reimbursed, or not supported by receipts | |
| Costs already claimed under the medical expense or home accessibility tax credits |
One family rule catches people: goods or services from a person related to the qualifying individual do not count unless that person is registered for GST/HST.
Practical consequence: ask for a quote and final invoice that keep the suite’s construction on separate lines from appliances and from any work elsewhere in the house. That makes the eligible amount easy to show.
How the claim works, step by step
- Before design: confirm who the qualifying individual and qualifying relation are, and that the home is owned by one of them.
- Design a self-contained unit: private entrance, kitchen, bathroom and sleeping area, with drawings and a building permit.
- Build and pass inspections, keeping every receipt, the permit and inspection records.
- Move in within 12 months after the renovation period ends.
- Claim on line 45355 of the federal return for the year the renovation was completed. You don’t apply to CRA before construction; keep every receipt, because costs not supported by receipts don’t count.
Your accountant or tax preparer makes the claim. Our part is the suite itself and clean, itemized paperwork.
Worked example
A Vaughan homeowner builds a permitted basement suite for her mother, who turns 70 in 2026. The suite has its own side entrance, a kitchen, a bathroom and a bedroom, and it is completed in October 2026. Her mother moves in in November.
- Eligible suite costs on the invoices (excluding the fridge, stove and dishwasher): $50,000 or more.
- Credit: 14% × $50,000 = $7,000, claimed on her 2026 return.
- If the eligible costs were $36,000, the credit would be 14% × $36,000 = $5,040.
For planning: a legal basement apartment in the GTA starts from about $55,000 when the ceiling height and a side entrance already work (2026 GTA market range, before HST). So for many suites the eligible costs reach the $50,000 cap, and the credit tops out at $7,000.
Other programs that can stack with a family suite
- Accessibility work for someone 65+ (grab bars, a curbless shower, safer stairs) may fit the federal Home Accessibility Tax Credit, on up to $20,000 of eligible expenses per year. The same expense can’t be claimed under both credits.
- Flood protection while the floor is open: Toronto’s Basement Flooding Protection Subsidy pays up to $6,650 per property. Other GTA cities and regions have their own programs; see rebates by region.
- Insulation of foundation walls can fit Home Renovation Savings; see insulation rebate amounts.
The full basement picture is in our basement renovation rebates and tax credits guide, and every program by city is in the Ontario renovation rebates finder.
How we help you claim it
We design the suite as a self-contained unit from the first drawing, handle the permit and inspections, and give you a fixed, itemized quote and invoice with the suite’s eligible work separated from appliances and other rooms. Your accountant files the claim; CRA decides eligibility. Request a Free Estimate Visit and tell us who the suite is for.
FAQ
How much is the Multigenerational Home Renovation Tax Credit in 2026?
Up to $7,000: 14% of up to $50,000 of eligible costs for a renovation completed in 2026. For 2025 completions, CRA shows 14.5%, up to $7,250.
Can I claim it for a rental basement apartment?
No. The suite must be for a qualifying individual (65+ or an adult eligible for the disability tax credit) who lives in the home with a qualifying relation.
Does my parent have to own the house?
No. The home must be owned by the qualifying individual or a qualifying relation, so an adult child who owns the house qualifies when the parent lives in the suite.
Is it a refund or a deduction?
It is a refundable tax credit, claimed on line 45355 for the year the renovation is completed, so it can be paid even if you owe little tax.
Do appliances count?
No. Household appliances are excluded. Building materials, fixtures, permits, plans, equipment rentals and contractor work on the suite can count.
Can we claim it twice?
Only one renovation can be claimed for each qualifying individual in their lifetime.
Sources (checked November 7, 2026):
- CRA: Multigenerational home renovation tax credit, line 45355 (modified January 20, 2026)
- CRA: Who is eligible for the MHRTC
- CRA: Expenses you can claim (MHRTC)
- Government of Canada news release: lowest personal income tax rate reduced to 14% effective July 1, 2025 (14.5% for 2025)
- Government of Canada: Report on Federal Tax Expenditures 2026 (MHRTC at the lowest personal income tax rate on up to $50,000)
- CRA: Home accessibility tax credit, line 31285 (modified July 24, 2026)
This guide explains the published rules; it is not tax advice. CRA decides eligibility.
