Editor’s note: An earlier version of this story incorrectly stated the number of multigenerational households in Canada as of 2021. The correct number is nearly 442,000 and has been updated. Global News regrets this error.

A renovation tax credit aimed at boosting the number of multigenerational homes in Canada is estimated to cost the federal government roughly $44 million over the next five years, according to the parliamentary budget officer (PBO).

The independent watchdog released its estimate on Wednesday for the Liberal government’s refundable tax credit for multiple generations of a family living together, which came into effect on Jan. 1, 2023.


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It allows families to claim 15 per cent of up to $50,000 in eligible renovation and construction costs for a secondary unit that has a private entrance, kitchen, bathroom and sleeping area in an existing home.

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In making its estimation for 2022-27, the PBO used data on the number of beneficiaries of the home accessibility tax credit, the number of disability tax credit claimants as well as estimates and projections on the population of persons aged 65 and older.


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The tax credit is set to “provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability,” according to the 2022 federal budget.

To be eligible to apply, the resident of the secondary unit must be a senior relative or a family member with a disability. Parents hoping to create a unit for their adult children without a disability are not eligible to take advantage of the tax benefit.

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“The housing unit must be ordinarily inhabited, or be reasonably expected to be ordinarily inhabited, within twelve months after the end of the renovation period,” the federal government says.

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Census data from Statistics Canada for 2021 showed that nearly 2.4 million Canadians – or 6.4 per cent of the total population – lived in multigenerational households.

In Canada, the number of multigenerational households has risen rapidly in recent years – totaling nearly 442,000 in 2021, according to StatCan. That is a 20 per cent increase compared to 2011.

In 2021, more than half a million Canadian children live in a multigenerational household, meaning they live with at least one parent and at least one grandparent, Statistics Canada said in its report released last year.


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Canada is facing a housing crunch, with a shortage of both homes and construction workers to build new units.

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While material costs and reliability of supply chains have been major factors affecting the cost and delivery of new housing in Canada over recent years, industry stakeholders have also been ringing warning bells about a labor crisis in the field.

Last year, Finance Minister Chrystia Freeland defended the 2022 budget as “the most ambitious plan that Canada has ever had” to solve the housing crisis.

“We need housing that is affordable for everyone, and that means we have to take significant steps to ensure an entire generation of Canadians is not priced out of owning a home,” Freeland said in April 2022.

— with files from Global News’ Craig Lord

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