Do you have a disabled child who is aging out and want to keep them at home? Perhaps you are considering a basement suite or something similar? Help is now here!
Starting in the 2023 tax year, a new tax credit is being introduced to help families add a secondary unit to their home for the purpose of allowing an immediate or extended family member to live with them. The family member must be a senior or an adult (age 18 or older) with a disability. A disability is defined as qualifying for the Disability Tax Credit at any time during the year.
This new credit will provide 15% tax credit on expenses of up to $50,000 or in other words, up to a $7,500 tax refund.
The secondary suite must be for a related adult over the age of 65 or an adult with a disability, including a grandparent, parent, child, grandchild, sibling, aunt, uncle, niece, or nephew. The suite must be self-contained and include a separate entrance, bathroom, kitchen and sleeping area. The unit must be inhabited or reasonably expected to be inhabited within 12 months after the renovations are completed.
Appliances, repairs, maintenance, security, financing costs, housekeeping or other services do not qualify for the credit. If you do the work yourself, you may not claim the labour as a cost, but you may claim permits, building materials, fixtures, plans and equipment rentals. If a family member or friend performs the work, you may claim their labour as an expense only if they have a GST/HST number.
The tax credit may be claimed by a person who lives in the house within 12 months of completed renovation and is:
- An eligible person (the senior or the adult with a disability) or,
- A spouse of the eligible person or,
- A qualifying relation of the eligible person, who owns the dwelling
Expenses claimed for the Multi-Generational Home Renovation Tax Credit may not also be claimed as a Home Accessibility Tax Credit or a Medical Expense Tax Credit.
Refer to the CRA site for more detailed information.