New federal tax credit for “multigenerational homes”

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New federal tax credit ;Federal tax for “multigenerational homes”

The tax credit is 15% of the lesser of eligible expenses and $50,000, up to a maximum amount of $7,500.

As of January 1, the federal government has offered a new tax credit to help Canadians live together with their parents or with a loved one in a situation of disability.

The “Multigenerational Home Renovation Tax Credit”, announced in April in Budget 2022, came into effect on January 1.

The new tax credit targets expenses related to the renovation of a house that will create a second dwelling in order to allow a senior or a person with a disability to live close to a relative.

The tax credit is 15% of the lesser of eligible expenses and $50,000, up to a maximum credit of $7,500.

< p class="e-p">Eligible housing must be for a loved one over the age of 65 or living with a disability. It can be a grandparent, parent, child, grandchild, sibling or sibling. a sister, aunt or uncle and niece or nephew.

This second dwelling is defined as “an independent dwelling having a private entrance, kitchen, bathroom and sleeping space”. It could be new construction or a unit created from an existing space “that did not already meet the requirements of a second unit”.

Furthermore, the renovation course must be already lived in, or at least reasonably expected to be within 12 months of the completion of the renovations.

Certain expenses, such as the purchase of household appliances and the cost of housekeeping or other services, are not eligible for the new tax credit federal government.

The Parliamentary Budget Officer has estimated that this tax measure will cost the federal government $44 million over the next five years.

This tax credit was part of a number of new “affordable housing” measures promised by the Liberals in the last election. They were included in Budget 2022 last April.

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