Canada is offering meaningful financial support in 2025 for families who are caring for aging parents or adults with disabilities. The government has introduced two impactful programs:
- The Multigenerational Home Renovation Tax Credit (MHRTC) – a one-time refundable tax credit of up to $7,500
- The Canada Disability Benefit (CDB) – a monthly payment of up to $200 for eligible individuals
Together, these programs are making it easier—and more affordable—for Canadians to create accessible living spaces and support loved ones in their own homes.
MHRTC: Up to $7,500 for Home Renovations
The Multigenerational Home Renovation Tax Credit (MHRTC) allows homeowners to claim 15% of renovation expenses, up to a maximum of $50,000, when constructing a self-contained secondary suite for a senior (65+) or an adult approved under the Disability Tax Credit (DTC).
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Eligibility for MHRTC
To qualify for the MHRTC in 2025:
- The renovation must include a private kitchen, bathroom, and entrance
- The homeowner must reside in the property
- Renovation costs must be incurred and paid in 2025
- The person living in the new suite must be 65+ or DTC-approved
- The home must meet local building codes
- Only one claim per eligible person is allowed lifetime
- Must be a Canadian resident throughout 2025
How to Claim the MHRTC
When filing your 2025 income tax return in spring 2026, complete:
- Schedule 12
- Enter the credit on line 45355
Be sure to retain all receipts, building permits, and before/after photos for documentation. These are essential in the event of a CRA review.
CDB: Monthly Income Support of Up to $200
The Canada Disability Benefit (CDB) is a new national support program for adults aged 18 to 64 who are approved for the Disability Tax Credit (DTC).
How Much Can You Receive?
- Maximum benefit: $200/month or $2,400/year
- Income-tested: Lower-income Canadians receive more
- Payments start: July 2025
- Application window: June 20 – December 31, 2025
If you’re already DTC-approved, payments begin as early as July if you apply before June 30. For others, benefits may also be paid retroactively up to 24 months.
Income Reduction Example
Let’s say Dan earns $35,000/year and qualifies for the DTC. Here’s how his benefit is calculated:
- Subtract $10,000 (working income exemption) = $25,000
- Subtract $23,000 (basic exemption) = $2,000
- Reduction = 20% of $2,000 = $400
- Final CDB = $2,000/year or approx. $167/month
How to Apply for the CDB
To apply:
- File your 2024 tax return
- Log in to CRA My Account or visit Service Canada
- Use your CRA-issued application code
- Submit any additional documentation, if requested
If the person is not yet approved for the Disability Tax Credit, download Form T2201, have it completed by a medical professional, and submit it to the CRA before applying for the CDB.
Renovation Planning Tips for MHRTC
Creating a compliant and accessible secondary suite can be a big project. Follow these steps to stay on track and maximize your refund:
Step 1: Plan the Renovation
- Get at least three quotes from contractors
- Choose professionals with experience in accessible home designs
- Budget 10–15% extra for surprises like inspection fees or material changes
Step 2: Apply for Building Permits
- Contact your municipal building office
- Ensure your plans meet accessibility and safety codes
- Submit permit applications well before renovation starts
Step 3: Track Every Expense
- Use a spreadsheet or budget tracking app
- Save all invoices, receipts, and permit approvals
- Take photos at each renovation milestone (before, during, after)
Filing Taxes and Claiming the Credits
Come spring 2026, file your 2025 taxes and:
- Include Schedule 12 to claim the MHRTC
- Apply separately for the CDB using your CRA code (online or in-person)
Regularly monitor your CRA My Account for application updates, income verification requests, or status changes.
Don’t Forget Provincial Benefits
You can combine federal and provincial programs to maximize your benefits. Some provinces offer extra credits:
- British Columbia: Up to $1,000 home renovation credit
- Ontario: Grants for accessibility upgrades and public transit
- Quebec: Tax assistance for disability-related home adaptations
These can stack with MHRTC and reduce your out-of-pocket expenses significantly.
Budgeting and Financing Advice
Smart Planning Tips
- Set a realistic timeline — delays are common in home renovations
- Reserve 10–15% extra for unexpected issues
- Consider a Home Equity Line of Credit (HELOC) or renovation loan if upfront costs are steep
Talk to a Tax Professional
A tax advisor can help you combine MHRTC with:
- Home Accessibility Tax Credit (HATC)
- Medical Expense Tax Credit
- Canada Caregiver Credit
Together, these can increase your refund amount even more.
Real Example: How the Patels Saved Over $8,700
In Ottawa, the Patel family renovated their garage in 2025 to create a private suite for Anjali’s 70-year-old mother. Their renovation cost $48,000.
- MHRTC refund: $7,200
- Their son, who qualifies for DTC, received $200/month under the CDB
- Total benefit in 2025: Over $8,700
Thanks to these programs, they were able to support three generations under one roof without breaking the bank.
Summary: What Each Program Offers
| Program | Who It’s For | Max Amount | How to Claim |
|---|---|---|---|
| MHRTC | Homeowners building suites for seniors or DTC adults | Up to $7,500 (15% of $50K) | File with 2025 tax return (Schedule 12) |
| CDB | DTC-approved adults (18–64) | Up to $2,400/year | Apply via CRA between June 20–Dec 31, 2025 |
Why These Programs Matter
The MHRTC and CDB are about more than money. They reflect a national commitment to:
- Multigenerational housing
- Inclusive living environments
- Supporting Canadians with disabilities
They also help families stay connected, reduce caregiving costs, and promote home accessibility.
Frequently Asked Questions (FAQs)
Q1. Who can claim the MHRTC?
Homeowners creating suites for a senior 65+ or an adult with DTC approval.
Q2. What qualifies as a secondary suite?
A private unit with its own entrance, kitchen, bathroom, and sleeping area.
Q3. When do CDB payments begin?
July 2025, for those approved and applied by June 30.
Q4. Is there a deadline for MHRTC claims?
Yes, the credit must be claimed on your 2025 tax return filed in 2026.
Q5. Can I combine these credits with others?
Absolutely. You can stack with HATC, Medical Expense Credit, and provincial programs.
