For the 2023 and subsequent tax years, a refundable credit to assist with the cost of renovating an eligible dwelling to establish a secondary unit that enables a qualifying individual ( a senior or an adult who is eligible for the disability tax credit) to live with a qualifying relation.
What is the MHRTC?
A qualifying renovation is one that creates a secondary unit within the dwelling that will be occupied by the qualified individual or a qualified relation. The value of the credit is 15% of the lesser of qualifying expenditures and $50,000. (Max $7,500)
Qualifying individual: 65 years of age or order; 18 years of age or older for whom an amount is deductible under the “ disability tax credit”
Qualifying relation: at least 18 years of age; or a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or spouse.
A “secondary unit” is a self-contained housing unit with a private entrance, kitchen, bathroom facilities and sleeping area. To be eligible, the secondary unit must meet applicable local requirements.
The individual must deemed to be a tax resident of Canada
Only one qualifying renovation is permitting during the lifetime of a qualifying individual.
What Types of expenses do qualify?
A qualifying expenditure may include the cost of goods acquired or services received, outlay or expenses for permits required for, or for the rental of equipment used in the course of renovation. If you do the work yourself, the value of your labour or tools is not qualified. If you hired a family member to perform the work, the expenses are not eligible unless that person is registered for GST/HST. Generally, work performed by professionals such as electricians, plumbers, carpenters and architects qualifies for the MHRTC. Expenses may be included in a claim must be reduced by any reimbursement such as those for GST/HST.
How will I claim the MHRTC?
For 2023 and subsequent taxation years, the MHRTC can be claimed on your T1 income tax and benefit return for the renovation period taxation year. For example, if the renovation starts in 2023, but completed in 2024, the credit will be claimed in 2024 tax return. On T1 tax return, line 45355 apply for this tax credit.
Reference:
https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2022-plan-grow-economy-make-life-more-affordable/multigenerational-home-renovation-tax-credit.html