CRA Confirms $7,500 Home Renovation Tax Credit – Eligibility Rules and Claim Process

The $7,500 Home Renovation Tax Credit 2025 has been officially confirmed by the Canada Revenue Agency (CRA) as part of the government’s efforts to support families, seniors, and Canadians with disabilities. This program is specifically designed to help households cover the costs of creating separate living spaces for elderly relatives or individuals with disabilities.

The refundable tax credit allows eligible families to claim up to $7,500, even if they owe no income tax. For many households, this financial relief will reduce renovation expenses and make homes more suitable for multigenerational living.

Why the Home Renovation Tax Credit Matters

Rising living costs and Canada’s aging population have placed financial and housing pressures on families. The Home Renovation Tax Credit serves three major purposes:

• Affordability: It lowers renovation costs by providing cash refunds or tax reductions.
• Accessibility: It ensures homes can be adapted for elderly or disabled family members.
• Independence: It allows seniors and disabled individuals to maintain privacy while staying close to loved ones.

By offering this support, the government aims to strengthen family care while ensuring long-term housing stability.

CRA Program Overview

Feature	Details
Administered By	Canada Revenue Agency (CRA)
Program Name	Home Renovation Tax Credit 2025
Amount	Up to $7,500
Tax Year	2025
Benefit Type	Federal refundable tax credit
Payment Mode	Cash refund or tax reduction
Category	Canada Finance
Official Website	canada.ca

Who Can Apply for the $7,500 Credit

Eligibility for the tax credit depends on the person, property, and renovation criteria.

• Person Criteria:
• Must be 65 years or older by the end of the tax year OR
• Must qualify for the Disability Tax Credit (DTC).
• Property Criteria:
• The home must be in Canada.
• It must be owned by the eligible person or a close relative (child, parent, or sibling).
• The residence must be regularly occupied or intended to be occupied within one year of completing the renovation.
• Renovation Criteria:
• The project must add a secondary living space with a bedroom, kitchen, and bathroom.
• It must improve privacy and accessibility for the senior or disabled family member.

Eligible and Non-Eligible Expenses

Not all renovation costs qualify under the program. The CRA has outlined clear rules:

Eligible Expenses Include:

• Building materials (lumber, flooring, plumbing fixtures).
• Contractor and architect fees.
• Equipment rental for construction.

Non-Eligible Expenses Include:

• Routine maintenance or minor repairs.
• Furniture purchases.
• Household appliances (refrigerators, ovens, etc.).

Only expenses directly related to creating a separate living unit are eligible.

Importance of the Credit for Families

The Home Renovation Tax Credit not only provides financial relief but also has broader benefits:

• Safety: Renovations improve accessibility, reducing fall risks for seniors.
• Comfort: Private living areas give elderly relatives independence.
• Home Value: Well-designed secondary units can increase property value.
• Family Unity: Multigenerational living becomes more affordable and practical.

This measure reflects the government’s recognition of the growing need for inclusive housing solutions.

How to Apply for the $7,500 Tax Credit

Applying for the credit involves several key steps:

• Plan the Renovation: Ensure your project complies with local building codes.
• Hire Certified Contractors: This reduces errors and ensures work meets CRA requirements.
• Keep Records: Save all invoices, receipts, and proof of payment during the project.
• Complete the Renovation: Ensure the project finishes within the 2025 tax year.
• File Schedule 12: Use this form to calculate eligible expenses.
• Report on Tax Return: Enter the claim amount on line 45355 of your return.
• Submit to CRA: Attach documents as required and monitor progress via CRA My Account.

Applicants who meet all conditions will receive their tax credit as either a refund or reduction in taxes owed.

Points to Remember Before Applying

• The project must result in a self-contained living unit.
• Renovation work must be documented with receipts.
• Applicants should avoid furniture and appliance claims, as these are not covered.
• Claims must be made in the same tax year the renovation is completed.

Looking Ahead

The $7,500 Home Renovation Tax Credit highlights the government’s continued push for affordable housing and care solutions. With Canada’s population aging, more families are expected to take advantage of this program in 2025.

By making housing more adaptable, the credit ensures seniors and disabled Canadians can live comfortably and independently while staying close to loved ones.

FAQs – $7,500 Home Renovation Tax Credit 2025

Q1. What is the maximum amount I can claim under the Home Renovation Tax Credit?
Eligible families can claim up to $7,500 for approved renovation expenses.

Q2. Who qualifies for the $7,500 credit?
Individuals 65 or older or those who qualify for the Disability Tax Credit (DTC), along with their immediate families.

Q3. What renovations are covered under the program?
Only those that create a separate living space with its own bedroom, bathroom, and kitchen.

Q4. How do I apply for the Home Renovation Tax Credit?
By filing Schedule 12 with your tax return, reporting the eligible costs, and attaching receipts.

Q5. Are appliances and furniture included in eligible expenses?
No, only construction-related costs (materials, contractors, equipment) qualify.