The federal Multigenerational Home Renovation Tax Credit (MHRTC) offers up to $7,500 (15% of $50,000) for building a secondary suite to house a senior (65+) or adult with disability. Here's how Ottawa homeowners qualify and claim it in 2026.
15% of up to $50,000 in eligible renovation expenses = maximum $7,500 tax credit. Refundable credit — even if you owe no tax, you receive the credit as a payment. Available once per qualifying individual; not per renovation. Claimed in the tax year the renovation is completed. Stacks with provincial energy retrofits, Canada Greener Homes, and other federal programs (but not double-dipping the same expense).
Qualifying individual: (1) age 65+ at end of tax year, OR (2) adult age 18-64 eligible for the Disability Tax Credit. Qualifying relation: parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, niece (of taxpayer or spouse). Secondary unit: must be self-contained with its own ...
All costs of building the secondary unit including: labour, materials, equipment rental, professional fees (architect, engineer, designer), permits, building inspections. Includes: foundation work, framing, drywall, flooring, kitchen and bathroom installation, electrical/plumbing/HVAC for the secondary unit, finishes. Excludes: furniture/appliances (unless built-in like dishwasher), security/electronic systems (unless integrated), landscaping (unless required by permit), regular home maintenance...
(1) Verify qualifying individual eligibility (age 65+ or DTC-approved). (2) Confirm secondary unit meets self-contained requirement (kitchen, bath, entrance, sleeping area). (3) Retain ALL receipts, contracts, contractor invoices showing labour + materials separately. (4) Document occupancy by quali...
Canada Secondary Suite Loan: up to $80K at 2% over 15 years for the same secondary suite construction. MHRTC eligible expenses can also be paid from this loan. Net effect: $50K of suite construction can yield $7,500 tax credit + $50K of the cost financed at 2%. Energy retrofits within the secondary suite (heat pump, insulation, windows) may also qualify for Canada Greener Homes Grant. Ottawa Home Accessibility Tax Credit (HATC): if renovation includes accessibility features, up to $3,000 additio...
(1) Basement apartment for aging parent: typical Ottawa basement suite $65K-$135K. Claim $7,500 MHRTC + 2% loan financing. (2) Detached coach house for adult child with disability: $185K-$325K Ottawa range. MHRTC credit + Greener Homes Loan stack. (3) Garden suite (detached single-storey): $145K-$24...
Because the Multigenerational Home Renovation Tax Credit is refundable and worth up to $7,500, the CRA reviews a meaningful share of claims, and weak documentation is the most common reason a claim is reduced or denied. Build your evidence file as the project happens, not at tax time. Keep every contractor invoice and contract showing labour and materials listed separately, every supplier receipt, permit fees paid to the City of Ottawa, and proof of payment such as cleared cheques or bank transf...
Reviewers focus on three things: that the individual qualifies (65-plus or Disability Tax Credit approved), that the unit is truly self-contained rather than a renovated bedroom, and that eligible expenses are construction costs, not furniture or appliances. Address all three in your file and most r...
The tax credit rewards building a separate dwelling, but the design choices that make a multigenerational suite genuinely livable for an aging parent go further. Plan a single-level layout or at least a barrier-free entrance, a curbless or low-threshold shower, 36-inch doorways for future mobility devices, lever handles, and blocking in the bathroom walls so grab bars can be added later without opening drywall. Sound separation matters as much as physical separation: an Ontario Building Code 1-h...
Even if your parent is independent today, building in accessibility now is far cheaper than retrofitting later. Wider halls, blocking for grab bars, a roll-in shower, and a no-step entry add modest cost during construction but preserve the option to age in place for a decade or more.
The tax credit does not exempt you from the permit process — and an unpermitted suite is ineligible because it is not a legal dwelling unit. Confirm your lot permits a secondary dwelling unit; Ottawa allows them as-of-right in most R1 through R4 zones following the 2024 zoning updates. A basement or interior in-law suite needs a building permit ($1,800-$5,500 typical), plus Electrical Safety Authority, plumbing, and HVAC permits. A detached garden suite or coach house follows the same permit pat...
Keep your permit numbers, inspection sign-offs, and the final occupancy permit in the same folder as your receipts. They prove the suite is a legal dwelling unit, which is a prerequisite for the credit and the strongest single document if the CRA questions the claim.
Up to $7,500 (15% of $50,000 in eligible expenses). Refundable credit — you receive it as a payment even if you owe no tax. Available once per qualifying individual.
Qualifying individual must be 65+ OR an adult (18-64) eligible for the Disability Tax Credit. They must be a close relative (parent, grandparent, child, sibling, etc.) of the taxpayer or spouse. They must occupy the new secondary suite within 12 months and live there at least 12 months.
Self-contained dwelling with its own (1) entrance, (2) kitchen, (3) bathroom, (4) sleeping area. Can be basement apartment, attached in-law suite with separate entrance, detached garden suite, or coach house. Must be a separate dwelling — not just an extra bedroom or open-plan addition.
Yes — MHRTC tax credit + Canada Secondary Suite Loan (up to $80K at 2% over 15 years) stack on the same secondary suite construction. Both programs can apply to the same renovation expenses without double-dipping the dollars themselves.
On your T1 tax return for the year renovation is COMPLETED (not the year you start). Use Schedule 12. Retain all contractor invoices, receipts, and proof of qualifying individual occupancy for at least 6 years in case of CRA review.