If you build a self-contained suite so a parent, grandparent or adult family member with a disability can live with you, Ottawa will pay back part of the cost. The Multigenerational Home Renovation Tax Credit (MHRTC) covers up to $50,000 of renovation spending. For a renovation finished in 2026, the credit is 14% of that, so the most you can get back is $7,000. It’s refundable, and you claim it on line 45355 of your return with Schedule 12.
You’ll still see “15%, up to $7,500” on a lot of sites. That was right when the credit started. It isn’t right for 2026, and the reason matters if you’re planning the timing of a project.
Why the number keeps changing
The MHRTC doesn’t have its own fixed rate. It’s tied to the lowest federal income tax rate, and that rate has dropped twice. Bill C-4, which received Royal Assent in March 2026, cut it to 14.5% for 2025 and 14% for 2026 onward. The $50,000 spending cap didn’t move, so the maximum credit went down with the rate.
| Year the renovation is finished | Credit rate | Maximum credit |
|---|---|---|
| 2023 or 2024 | 15% | $7,500 |
| 2025 | 14.5% | $7,250 |
| 2026 and later | 14% | $7,000 |
What counts is the year the work is finished, not the year it started. The CRA treats the renovation as complete when it passes final inspection or you get proof of completion. A suite you started in fall 2025 and got signed off in March 2026 goes on your 2026 return at 14%.
How much you’ll actually get back
Multiply your eligible costs by 14%, stopping at $50,000 of costs. A few 2026 examples:
- $30,000 of eligible work gives a $4,200 credit.
- $50,000 gives $7,000.
- $140,000 also gives $7,000. Everything above $50,000 is ignored.
That last case is the realistic one. A legal basement apartment or a garden suite in the GTA almost always costs well over $50,000 once you add permits, plumbing, a kitchen and fire separation. So for most families the useful question is whether you qualify at all. If you do, you’ll almost certainly hit the cap.
Because the credit is refundable, you get it even if you owe little or no tax. Say your federal tax for the year comes to $2,000 before this credit. The $7,000 credit wipes out the $2,000, and the CRA sends you the other $5,000. That makes it useful for retirees paying for a suite in a child’s house, who often don’t owe much tax.
Who qualifies
Three things have to line up: the person the suite is for, the person paying, and the suite itself.
The person moving in
The CRA calls this person the qualifying individual. They must be 65 or older by the end of the year the renovation finishes, or an adult who’s eligible for the disability tax credit. They can only be the reason for one MHRTC claim in their lifetime. If your brother already claimed it for a suite for your mother in 2024, you can’t claim it again for her in 2026, even in a different house.
The person paying
Whoever pays for the work claims the credit. That can be the senior or adult with a disability, their spouse or common-law partner, or a qualifying relation: a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew. In-laws count too, through the spouse.
If more than one person pays, they can split the claim, as long as the total stays under $50,000 of costs and nobody claims more than they spent. Say two siblings pay $35,000 and $25,000 toward a $60,000 suite for their father. They have $50,000 to divide. They could split it in proportion to what each paid, or one sibling could claim their full share and the other take the rest. The CRA’s own worked example on the how-to-claim page walks through both options.
The suite
The renovation has to create a new secondary unit. Fixing up a suite that was already legal doesn’t count. The new unit needs its own private entrance, kitchen, bathroom and sleeping area, and it has to be built with permits and meet the local zoning bylaw and the Building Code.
It doesn’t have to be inside the main house. A garden suite in the backyard or an apartment over a detached garage qualifies, as long as it’s on the same property. A basement suite, a new addition with its own entrance, or a converted main floor can all work too. Our guide to multigenerational home design in Ontario compares the three main layouts.
What you can and can’t claim
Eligible costs are the ones that go into building the unit: contractor labour, materials, building permits, architectural and engineering drawings, and equipment rentals. If you do part of the work yourself, your materials and permits still count, but your own time doesn’t.
These don’t count:
- Appliances you could take with you, like a fridge, stove or washer
- Furniture, TVs and electronics
- Routine repairs and maintenance, cleaning, gardening and security monitoring
- Work paid to a relative, unless that relative is registered for GST/HST
- Any amount you got back as a grant, rebate or reimbursement, including GST/HST rebates
The relative rule is the one that catches people. If your cousin does the drywall for cash, that money doesn’t count. If he runs a registered business and invoices you with an HST number, it does.
You also can’t claim the same dollar twice. Grab bars, a curbless shower or wider doorways in the new suite might also qualify for the Home Accessibility Tax Credit or the medical expense credit. Decide which credit each cost goes under. Since the MHRTC cap is easy to hit on a full suite, it often makes sense to put accessibility items under the HATC and the rest under the MHRTC.
Paperwork to keep
You don’t send receipts with your return, but the CRA can ask for them. Keep invoices that show the contractor’s name, business address and GST/HST number, what work was done, the property address, the amount, and proof you paid. Keep the building permit and the final inspection record too, since that’s what shows the unit is legal and when it was finished.
If you’re building with us, ask for the final invoice to list appliances on their own line. It makes the claim easier to fill in, because those amounts come straight off the total.
Mistakes that cost people the credit
The most common one is building a bedroom and bathroom for a parent without a kitchen. It might be a perfectly good space, but without a kitchen it isn’t a self-contained unit, so it doesn’t qualify.
Next is skipping the permit. An unpermitted basement apartment fails the “meets local building rules” test, no matter how well it’s finished. In Mississauga, Brampton and most other GTA cities, a second unit needs a building permit, and a garden suite needs one as well as a zoning check.
The third is the person moving in. The credit is for a related senior or adult with a disability. A paid caregiver or a family friend doesn’t qualify, even if they need the space. The person also has to actually live there: the CRA expects the qualifying individual and the person claiming to be living in the home, or planning to, within 12 months after the work finishes.
Frequently asked questions
How much is the MHRTC worth in 2026?
For a renovation finished in 2026, it’s 14% of up to $50,000 in eligible costs, so a maximum of $7,000. Renovations finished in 2025 used 14.5% ($7,250 max), and 2023 or 2024 used 15% ($7,500 max).
Can I claim the MHRTC and the Home Accessibility Tax Credit on the same costs?
Not on the same dollar. You can claim both credits for one project, but each cost goes under only one of them.
Does a detached garden suite qualify?
Yes. The unit can be a separate building, as long as it’s on the same property as the main house and meets local zoning and the Building Code.
Who counts as a qualifying individual?
A person who is 65 or older by the end of the year the renovation finishes, or an adult eligible for the disability tax credit. No one can have claimed the MHRTC for them before.
Can two family members split the claim?
Yes. Each person claims only what they paid, and the combined claim can’t go over $50,000 of costs.
What if the work runs past December 31?
You claim everything on the return for the year it finishes, including costs you paid the year before. If you’re close to the line in late 2026, there’s no rate advantage to rushing, since 2027 is also 14%.
Planning a suite for family
The credit is a nice bonus, but it won’t decide whether the project makes sense. Layout, permits and budget will. If you want to see what a suite would cost before you get into the tax side, start with our in-law suite cost guide, or get in touch and we’ll look at your lot and house with you. Leedway has been designing and building homes, additions and garden suites across Mississauga and the GTA since 2009.
This article explains how the credit works. It isn’t tax advice for your situation, so confirm your claim with your accountant or the CRA’s MHRTC page before you file.
