The federal government iMulti-Generational Home Renovation Tax Credit Available
The multi-generational home renovation tax credit took effect January 1st for expenses related to building a secondary suite for a family member who is a senior or an adult with a disability.
The credit will provide a 15% tax refund on expenses of up to $50,000 – to a maximum of $7,500.
Am I eligible for the tax credit?
In order to be able to claim the tax credit, you must meet a few requirements, including:
- The secondary suite must be a self-contained housing unit that includes a separate entrance, bathroom, kitchen and sleeping area
- The home being renovated must be inhabited/reasonably expected to be inhabited within 12 months following completion of the renovations
- Some expenses, such as the purchase of appliances and costs for housekeeping or other services, don’t qualify for the credit
Financing home renovations
Regardless of the type of renovations you’re planning to make, your mortgage agent may be able to free up some of your home’s equity as an affordable way to finance your home improvements.
Often times, people rely on high-interest unsecured credit such as credit cards and credit lines to pay for renovations. But the interest you end up paying above and beyond the cost of the renovations can quickly add up.
Your mortgage agent can look at several options to access home equity such as a home equity line of credit or mortgage refinance. Although there may be a penalty associated with breaking your mortgage early to tap into your equity, it may still be more cost effective than using high-interest credit payment options.
And if your mortgage is coming up for renewal, now’s the perfect time to access equity since you won’t be charged a fee to break your mortgage.
Have questions about this new tax credit or financing your home renovations? Answers are a call or email away!