The $7,500 In-Law Suite Credit
Effective in 2026, the Federal Multigenerational Home Renovation Tax Credit (MHRTC) provides a 15% refundable tax credit on up to $50,000 of eligible renovation costs, resulting in a maximum refund of $7,500 [14]. This credit is specifically for building a self-contained secondary unit to allow a senior (65+) or an adult with a disability to live with a relative [16].
RenoRaptors.ca can capture this niche by optimizing for "Aging-in-Place" and "In-Law Suite" keywords. The requirement for a separate entrance, kitchen, and bathroom aligns perfectly with the City of Barrie's ARU standards [12], allowing RenoRaptors to sell the same product under a different, tax-advantaged emotional hook [14].
Why This Matters for Barrie Homeowners:
- •Same build, two frames: A legal Barrie ARU (basement suite or garden suite) with separate entrance, kitchen, and bathroom meets MHRTC secondary unit requirements
- •Refund, not deduction: The MHRTC is refundable—you get money back even if you owe no tax
- •One-time per qualifying individual: Only one MHRTC claim is permitted per qualifying individual (the senior or person with a disability) during their lifetime [14][16]
Source: Canada, CRA, Budget 2022 – Multigenerational Home Renovation Tax Credit [14]; CRA, Who can claim – MHRTC [16]; City of Barrie, Additional Residential Units [12]
Up to $7,500 — Maximum MHRTC refund per qualifying renovation (15% of up to $50,000 in eligible costs)
What Is the MHRTC and Who Qualifies?
The MHRTC is a refundable tax credit introduced in the 2022 Federal Budget, effective for 2023 and subsequent taxation years [14]. You can claim it on your income tax return for the year the renovation is completed [14].
Credit amount: - 15% of qualifying expenditures - Up to $50,000 in eligible costs per qualifying renovation - Maximum refund: $7,500 ($50,000 × 15%) [14]
Qualifying individual (must live in the existing dwelling or the new secondary unit) [16]: - 65 years of age or older at the end of the renovation tax year, OR - 18 to 64 and eligible for the Disability Tax Credit (DTC) at any time in that year
Qualifying relation (the relative who will live with the qualifying individual) [16]: - At least 18 years old at the end of the tax year you claim - A parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew of the qualifying individual (or of the qualifying individual's cohabiting spouse or common-law partner)
Eligible claimant: You must be a Canadian resident who either ordinarily resides (or intends to within 12 months) in the dwelling and are the qualifying individual, their spouse/common-law partner, or a qualifying relation—or you own the dwelling and are a qualifying relation of the qualifying individual [16].
Source: CRA, Budget 2022 – MHRTC [14]; CRA, Who can claim – MHRTC [16]
Only one MHRTC claim is permitted per qualifying individual (the senior or person with a disability) during their lifetime.
What Counts as a Secondary Unit?
For the MHRTC, a secondary unit must be [16]:
- •Self-contained housing unit
- •Private entrance
- •Kitchen
- •Bathroom
- •Sleeping area
The unit must be newly constructed or created from existing space that did not already meet local requirements for a secondary dwelling unit, and it must meet all applicable local requirements, permits, codes, and by-laws [14][16].
The secondary unit does not need to be physically part of the existing structure—it can be a separate building on the same land (e.g. a garden suite or coach house), as long as it is on the same property as the eligible dwelling [16].
Source: CRA, Who can claim – MHRTC [16]; CRA, Budget 2022 – MHRTC [14]
Adding only a bedroom with ensuite bathroom is not enough—a kitchen is required for the space to qualify as a secondary unit.
How MHRTC Aligns With Barrie ARU Standards
The City of Barrie defines an Additional Residential Unit (ARU) as a self-contained dwelling with separate kitchen and bathroom facilities [12]. Barrie permits ARUs within the main house (e.g. basement apartments) or in accessory buildings (e.g. coach houses).
Alignment:
| Requirement | MHRTC (CRA) **[14][16]** | Barrie ARU **[12]** |
|---|---|---|
| Self-contained | Yes | Yes |
| Kitchen | Required | Required |
| Bathroom | Required | Required |
| Sleeping area | Required | Implied (dwelling unit) |
| Private/separate entrance | Required | Required (or shared per Barrie) |
| Local permits & code | Required | Required |
A renovation that meets Barrie ARU standards (separate entrance, kitchen, bathroom, and compliance with By-law 2020-010 and the Ontario Building Code) will satisfy the MHRTC secondary unit definition [14][16]. The same build can serve both: a legal rental suite under Barrie rules and a tax-credited in-law or aging-in-place suite under the MHRTC—depending on who occupies it and how you claim it.
Source: City of Barrie, Additional Residential Units [12]; CRA, Budget 2022 – MHRTC [14]; CRA, Who can claim – MHRTC [16]
Eligible Expenses and Claiming
What qualifies as an expenditure [14]: - Labour costs from arm's length professionals (or from related persons registered for GST/HST) - Building materials, fixtures, equipment rentals - Permits and building plans directly attributable to the qualifying renovation
What does NOT qualify [14]: - Routine maintenance, household appliances, financing costs - Work performed by unregistered family members (their labour) - Expenses claimed under the Medical Expense Tax Credit or Home Accessibility Tax Credit - Amounts reimbursed or rebated (e.g. GST/HST rebates must be deducted)
When to claim: You claim the MHRTC in the tax year when the renovation is completed, regardless of when work started [14].
Documentation: Keep receipts, invoices, and agreements that clearly identify the vendor, description of goods/services, dates, and amounts. The CRA may ask for proof of payment [14].
Source: Canada, CRA, Budget 2022 – Multigenerational Home Renovation Tax Credit (Q11, Q17–Q19) [14]
If you do the work yourself, you can claim materials, fixtures, permits, and equipment rentals—but not the value of your own labour.
Stacking With Barrie and Simcoe Incentives
The same project may qualify for Barrie and Simcoe incentives (e.g. 50% permit fee reduction, Barrie Bonus, Simcoe County forgivable loan) and the MHRTC. The MHRTC is a federal tax credit; municipal grants are separate.
Important: Qualifying expenditures for the MHRTC must be reduced by any reimbursement or assistance you are entitled to receive [14]. If a grant or forgivable loan covers part of the renovation cost, that portion generally cannot be counted toward the $50,000 eligible for the 15% credit. Consult an accountant or the CRA to confirm how specific programs interact.
Practical takeaway: Plan your project to Barrie ARU and MHRTC specs, apply for municipal incentives where you qualify, keep detailed records, and claim the MHRTC in the year the renovation is completed—after reducing eligible costs by any reimbursements.
Source: CRA, Budget 2022 – MHRTC (Q21) [14]
Next Steps
If you're considering an in-law suite or aging-in-place renovation in Barrie or Simcoe County, here's a practical path.
Step 1: Confirm eligibility - Identify the qualifying individual (65+ or adult eligible for DTC) and the qualifying relation who will live in the secondary unit - Ensure the dwelling is (or will be) owned by the qualifying individual or a qualifying relation and that both will ordinarily reside there within 12 months of the renovation end [16]
Step 2: Plan the secondary unit - Design to Barrie ARU standards: separate entrance, kitchen, bathroom, sleeping area, and all local permits and code - This satisfies both Barrie registration and MHRTC secondary unit requirements [12][14][16]
Step 3: Build and document - Obtain building permits and complete the renovation - Keep all receipts, invoices, and proof of payment for eligible expenditures - Claim the MHRTC on your tax return for the year the renovation is completed [14]
Why work with a specialist?
We build legal ARUs that meet Barrie bylaws and the Ontario Building Code—the same specs that qualify for the MHRTC. Whether you're creating a suite for a parent, an adult child, or a tenant, we can deliver a compliant secondary unit and help you understand what to document for the credit.
Ready to explore your in-law suite or aging-in-place project?
Contact us for a free consultation. We'll discuss your property, your family situation, and how a Barrie ARU can align with the MHRTC.
References
[12] City of Barrie, "Additional Residential Units," barrie.ca. https://www.barrie.ca/planning-building-infrastructure/development/additional-residential-units
[14] Canada Revenue Agency, "Multigenerational Home Renovation Tax Credit," Budget 2022 – Plan to Grow the Economy and Make Life More Affordable, canada.ca. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2022-plan-grow-economy-make-life-more-affordable/multigenerational-home-renovation-tax-credit.html
[16] Canada Revenue Agency, "Who can claim – Multigenerational home renovation tax credit (MHRTC)," canada.ca. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/multigenerational-home-renovation/eligible-mhrtc.html
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