The Multigenerational Home Renovation Tax Credit can reduce the cost of creating a self-contained secondary suite for a qualifying senior or a Disability Tax Credit-eligible adult who will live with a qualifying relative. For renovations completed in 2026, federal law applies a 14% rate to up to $50,000 of qualifying expenditures, resulting in a maximum credit of $7,000.
2026 Accuracy Note
When this credit launched in 2023, the maximum was $7,500. Because the Income Tax Act calculates the credit using the federal lowest personal income tax rate, which was 14.5% for 2025 and is 14% for 2026 and later years, the maximum refundable credit is $7,250 for renovations completed in 2025 and $7,000 for renovations completed in 2026. Confirm current rules with the CRA or a qualified tax professional before filing.
Key Takeaways
- The MHRTC is a refundable federal tax credit for eligible expenses incurred to create a qualifying self-contained secondary unit for a senior aged 65+ or an adult who is eligible for the Disability Tax Credit.
- For renovations completed in 2026, up to $50,000 in qualifying expenditures can be used in the calculation, and the 14% federal rate yields a maximum credit of $7,000.
- A qualifying secondary unit must be self-contained, comply with local requirements, and include a private entrance, kitchen, bathroom, and sleeping area.
- A basement conversion, home addition, or separate structure on the same property may qualify if all family, dwelling, occupancy, and renovation conditions are met.
- The same expense cannot be claimed under both the MHRTC and the Home Accessibility Tax Credit or the medical expense tax credit.
- Only one qualifying renovation can be claimed per qualifying individual over their lifetime, so plan the suite before you build.
How Does the Multigenerational Home Renovation Tax Credit Work for a Secondary Suite for My Parent?
The Multigenerational Home Renovation Tax Credit refunds a percentage of qualifying costs after an eligible family creates a new self-contained secondary unit and completes the renovation. The MHRTC New Brunswick families’ claim is a federal credit, so the core tax rules are the same across Canada, while permits and building requirements are local.
MHRTC eligibility in 2026 starts with the people and their living arrangements. A qualifying individual must be 65 or older at the end of the tax year, or be between 18 and 64 and eligible for the Disability Tax Credit during the renovation period tax year. The eligible dwelling must be in Canada, and the qualifying individual and a qualifying relation must ordinarily live at, or reasonably be expected to live at, the property within 12 months after the renovation period ends. Only one qualifying renovation can be claimed for each qualifying individual over their lifetime, so it pays to plan the suite carefully before you build. For CRA’s worked examples, see its Who can claim guidance.
The secondary unit must be newly created or converted from existing space that did not previously meet local requirements for a secondary dwelling unit. CRA defines a qualifying unit as self-contained, with a private entrance, kitchen, bathroom, and sleeping area. The renovation must be permanent and integral to the dwelling, not a temporary setup.
| Tax Year | Federal Rate | Maximum MHRTC on $50,000 |
|---|---|---|
| 2024 | 15.0% | $7,500 |
| 2025 | 14.5% | $7,250 |
| 2026 and later | 14.0% | $7,000 |
The rate matters because the MHRTC uses the federal “appropriate percentage,” the lowest personal income tax rate for the year. The original 15% rate set a $7,500 maximum on $50,000 of qualifying expenses. The 2025 rate was 14.5%, and current law reduces the rate to 14% for 2026 and later years, lowering the 2026 maximum to $7,000.
Official 2026 Rate Basis: Income Tax Act, Sections 117, 248, and 122.92; Making Life More Affordable for Canadians Act (S.C. 2026, c. 2). Official guidance: CRA MHRTC.
Build a Secondary Suite for My Aging Parent in New Brunswick
You can build a secondary suite for your aging parent in New Brunswick and potentially claim the MHRTC if the project creates a qualifying unit and the family meets the CRA’s ownership, relationship, occupancy, and tax-residency rules. The best time to confirm eligibility is before design decisions are finalized, because the credit is tied to how the finished unit functions.
A practical secondary suite for a parent in New Brunswick typically includes four non-negotiables for MHRTC purposes: a private entrance, kitchen, bathroom, and sleeping area. Beyond the tax rules, the design should also reflect how your parent will use the space. Good lighting, safer bathing, easy-to-use hardware, clear circulation, and fewer level changes can make multigenerational living in Canada more comfortable without making the suite look institutional.
Qualifying expenditures may include reasonable costs directly attributable to the qualifying renovation, such as professional trades, building materials, fixtures, equipment rentals, building plans, and permits. The CRA excludes routine maintenance, household appliances, financing costs, unsupported expenses, and certain related-party work. If another credit or reimbursement covers a specific expense, you also need to check whether that amount must be excluded from the MHRTC claim.
If you are still deciding what your parent needs today versus what may be useful later, NYCO’s Future-Ready Home Assessment can help organize the renovation into practical priorities before you commit to a full secondary-suite scope.
Build an In-Law Suite Addition for My Aging Parent in Greater Moncton
An in-law suite addition can be a strong choice in Greater Moncton when the existing house lacks suitable basement space or when main-floor access is important. For MHRTC purposes, an addition may qualify if it creates a new self-contained secondary unit and meets all other federal eligibility requirements.
For many families, the advantage of an addition is design freedom. You can plan the suite around everyday routines instead of trying to force a bedroom, kitchen, bathroom, storage, and circulation into an existing footprint. That can make it easier to create a low-threshold entrance, a comfortable bathroom, practical kitchen storage, ample lighting, and enough room for a walker or future mobility needs.
NYCO’s home addition service is designed for this type of full-scope project, where the foundation, structure, mechanical systems, finishes, and the connection to the existing home must all be coordinated. NYCO manages the renovation from planning through final walkthrough, communicates changes clearly, and backs workmanship with a 5-year warranty.
Local approvals still matter. The CRA requires the secondary unit to comply with applicable permits, codes, and by-laws. Moncton, Dieppe, Riverview, and surrounding communities may have different zoning and permitting requirements, so confirm the local requirements before construction begins. The tax credit should support a sound renovation plan, not push the family into a layout that does not work for the property or the people living there.
Convert My Basement Into an In-Law Suite in Moncton and Claim the MHRTC
A basement conversion in Moncton can qualify for the MHRTC if it creates a new self-contained secondary unit that meets CRA and local requirements. The fact that the space already exists does not disqualify it, but an ordinary finished basement or guest room is not sufficient unless it becomes a qualifying secondary dwelling unit.
Before budgeting for a basement in-law suite in Moncton, assess the building first. Ceiling height, moisture, drainage, egress, stair access, fire separation, electrical capacity, plumbing routes, natural light, and the ability to create an appropriate entrance can all affect scope and price. A lower-cost conversion is only valuable if the finished space is safe, legal, comfortable, and durable.
NYCO’s basement renovation service can help determine whether an existing basement can be converted into a functional apartment-style suite or whether an addition is the better option. For families comparing options, the design decision should come before the tax-credit calculation.
The $50,000 MHRTC expenditure ceiling is a tax calculation limit, not a promise about the cost of a secondary suite. If a qualifying 2026 renovation has $35,000 in eligible expenses, the 14% credit is $4,900. If qualifying expenses are $50,000 or more, the 2026 credit is capped at $7,000. Keep detailed invoices, receipts, proof of payment, and contractor information, as the CRA may require documentation to support the claim.
Frequently Asked Questions
Can I Still Get $7,500 From the MHRTC in 2026?
Not eligible for a qualifying renovation completed in 2026 under current federal law. The $7,500 figure reflects the original 15% credit rate applied to $50,000 of eligible expenses. The lowest federal personal income tax rate for 2026 is 14%, and the MHRTC uses that rate, so the maximum for a 2026 completion is $7,000.
Can My Parent Live in the Main House While I Use the New Suite?
Yes, potentially. CRA allows the secondary unit to be occupied by either the qualifying individual or the qualifying relation. What matters is that the qualifying individual and a qualifying relation either ordinarily inhabit or are reasonably expected to inhabit the eligible dwelling within 12 months after the renovation period ends, provided all other conditions are met.
Can a Detached Garden Suite Qualify for the MHRTC?
Potentially, yes. The CRA states that the secondary unit does not have to be physically attached to the existing structure if it is on the same land as the eligible dwelling. The unit must still be self-contained, meet local requirements, and satisfy the ownership, relationship, occupancy, and renovation conditions for the credit.
Can I Claim the Same Expense Under the MHRTC and the HATC?
No. The CRA does not allow the same expense to be claimed under both the MHRTC and the Home Accessibility Tax Credit, and the same restriction applies to expenses already claimed as medical expenses. A project may include different eligible costs, but families should allocate and document them carefully before filing.
What Records Should I Keep for an MHRTC Claim?
Keep contracts, detailed invoices, receipts, delivery records, proof of payment, permit records, and contractor or vendor information. The CRA says supporting documents should identify the work, property address, dates, amounts, and the vendor’s business details, including a GST/HST registration number where applicable. Good records help protect the value of the credit.
The Multigenerational Home Renovation Tax Credit is a refundable federal tax credit that helps eligible Canadian families offset part of the cost of creating a qualifying secondary unit for a senior or an adult eligible for the Disability Tax Credit.
Conclusion
A secondary suite can give a parent privacy and independence while keeping the family close, but the right project starts with the home, the people, and the long-term plan. NYCO brings design, construction, aging-in-place expertise, clear communication, and a 5-year workmanship warranty together so the renovation is easier to understand from the start. If you are considering an in-law suite in Moncton, Dieppe, Riverview, or the surrounding Greater Moncton Area, Book Your Free Consultation and start with a conversation, not a sales pitch.
