What is the Multigenerational Home Renovation Tax Credit?

The federal MHRTC provides a 15% refundable tax credit on up to $50,000 of eligible renovation expenses to add a secondary unit for a senior (65+) or adult with a disability. The maximum credit is $7,500.

Can you get a mortgage for a multigenerational home?

Yes. Lenders offer specific multigenerational mortgage programs that can include income from multiple generations to qualify. CMHC has a Multigenerational Housing Program with extended amortizations up to 30 years for adding secondary suites.

What are the tax implications of a multigenerational home?

If family lives rent-free, there are no tax implications. If you charge rent (even below market), you must report rental income but can deduct expenses. The main unit keeps the principal residence exemption; the suite portion may not.

Multigenerational Homes in Canada: Financial and Legal Considerations (2026)

Multigenerational living is growing fast in Canada, driven by housing affordability challenges and the desire to keep aging parents close. When it works, it’s one of the most financially powerful housing arrangements available: shared mortgage payments, built-in childcare, reduced elder care costs, and pooled resources for a better property than anyone could afford alone. The federal government now supports this with the Multigenerational Home Renovation Tax Credit (up to $7,500), CMHC’s extended 30-year amortization for secondary suites, and provincial grant programs worth up to $40,000 in BC. The key to success is getting the legal structure and written agreements right before you move in.

Benefits of Multigenerational Living

Benefit	Details
Shared housing costs	Split mortgage, utilities, property tax
Childcare support	Grandparents help with grandchildren
Elder care	Care for aging parents at home
Social benefits	Reduced isolation for seniors
Financial flexibility	Combined income for larger home
Building wealth	Pooled resources, property appreciation

Types of Multigenerational Arrangements

Arrangement	Description
Secondary suite	Basement apartment, in-law suite
Attached addition	Separate entrance, connected to main home
Laneway/Garden suite	Detached unit on same property
Large single home	Shared spaces, private bedrooms
Duplex/Side-by-side	Separate units, one property

Financing Multigenerational Homes

CMHC Multigenerational Program

Feature	Details
Purpose	Add accessible secondary unit
Eligibility	Adding suite for senior or disabled family member
Amortization	Up to 30 years (vs standard 25)
Premium	Standard CMHC premium
Combined income	Multiple family members can qualify together

Traditional Financing with Co-Borrowers

Structure	Details
Co-borrowers	Parents + adult children on mortgage
Income	All borrowers’ income counts
Liability	All borrowers responsible
Credit	All borrowers’ credit reviewed

Separate Financing

Scenario	Approach
Parents own, finance suite addition	HELOC or refinance
Children buy, parents contribute down payment	Gift or loan documentation
Joint purchase	Multiple names on title

Multigenerational Home Renovation Tax Credit (MHRTC)

The MHRTC is a refundable federal tax credit that covers 15% of up to $50,000 in eligible renovation expenses to add a self-contained secondary dwelling for a senior (65+) or adult with a disability. That’s up to $7,500 back, even if you have no tax owing. The secondary unit must have its own private entrance, kitchen, and bathroom facilities. This credit can be combined with provincial programs (like BC’s $40,000 forgivable loan) for significant financial support. Keep all receipts and hire licensed contractors — your own labour doesn’t qualify.

Eligibility

Requirement	Details
Qualifying individual	Senior (65+) or adult (18+) with disability
Relationship	Parent, grandparent, child, grandchild, sibling
Purpose	Create self-contained secondary dwelling
Secondary dwelling	Private entrance, kitchen, bathroom facilities

Credit Calculation

Factor	Amount
Eligible expenses	Up to $50,000
Credit rate	15%
Maximum credit	$7,500
Refundable	Yes (can get refund even if no tax owing)

Eligible Expenses

Eligible	Not Eligible
Construction labour	Furniture and appliances
Building permits	Annual, recurring costs
Architect fees	Maintenance costs
Materials	Work on main dwelling
Modifications for accessibility	Cleaning services

Legal Structures

Getting the ownership structure right is critical for multigenerational homes. Joint tenancy means the property passes automatically to the surviving owner, which works well for spouses but may not suit parent-child arrangements where you want unequal shares or specific estate planning. Tenants in common allows unequal ownership and passes each person’s share through their estate. Whichever structure you choose, get a co-ownership agreement that covers contribution amounts, responsibilities, exit strategies, and what happens if someone wants out. A few thousand dollars in legal fees now prevents catastrophic family disputes later.

Title Options

Structure	Pros	Cons
Joint tenancy	Passes to survivor	Equal shares only
Tenants in common	Unequal shares possible	Passes to heirs, not co-owner
Single owner	Simple	Owner bears all risk
Trust	Control, planning	Complexity, cost

Agreements to Consider

Document	Why Needed
Co-ownership agreement	Define contributions, responsibilities
Occupancy agreement	Rights if relationship changes
Exit strategy clause	What happens if someone wants out
Estate planning updates	Wills reflecting new situation

Tax Implications

If Family Lives Rent-Free

Tax Aspect	Treatment
Income to declare	None
Expense deductions	None
Principal residence exemption	Applies to whole property

If Charging Rent

Tax Aspect	Treatment
Rental income	Must report
Deductible expenses	Pro-rated share
Principal residence exemption	May be reduced
Capital gains on sale	Suite portion may be taxable

Below-Market Rent

Consideration	Details
CRA view	Rent must be reasonable or it’s personal use
If well below market	Not considered rental business
Record keeping	Document fair market rent research

Provincial Secondary Suite Programs

BC

Program	Details
BC Secondary Suite Grant	Up to $40,000 forgivable loan
Requirement	Rent at below-market rate
Duration	5 years minimum

Ontario

Program	Details
No provincial grant	Municipal programs may exist
Secondary suite registration	Some municipalities require
Building permits	Required for legal suite

Other Provinces

Province	Programs
Alberta	Some municipal grants
Manitoba	Limited programs
Quebec	Accès Famille programs

Zoning and Permits

Check	Why
Zoning bylaws	Secondary suites allowed?
Building permits	Required for construction
Fire separation	Safety requirements
Parking requirements	May need additional spaces
Minimum suite size	Municipal standards
Separate entrance	Often required

Pros and Cons Summary

Pros

Benefit	Impact
Cost sharing	~20-40% housing cost reduction
Family support	Priceless
Tax credits	Up to $7,500 MHRTC
Property value	Well-designed suites add value

Cons

Challenge	Mitigation
Privacy loss	Design for separation
Family conflict	Written agreements
Resale limitations	Target multigenerational buyers
Complex financing	Work with experienced lender
Zoning restrictions	Research before buying

The Bottom Line

Multigenerational living can reduce housing costs by 20–40% while keeping family close, and government programs now provide meaningful financial support. Get a co-ownership agreement, plan your tax structure (rent-free vs. charging rent), and take advantage of the MHRTC and provincial grants to offset renovation costs.