The Canadian government has recently introduced a new tax credit for homeowners who are looking to add a secondary unit to their homes for a loved one over 65 or with a disability. The (max) $7,500 tax credit is designed to encourage homeowners to build additional units in their homes, with the aim of promoting denser, more sustainable communities. This is a great opportunity for homeowners to take advantage of and get a 15% return on their renovations up to $50,000.
Adding a secondary unit to your home can have many benefits. Firstly, it can provide a steady source of income for homeowners. By renting out the unit, even to family, homeowners can earn a passive monthly income that can help offset their mortgage payments and other living expenses. This can be particularly beneficial for retiree tenants, who may be looking for ways to extend the life of their pensions & savings.
In addition to providing a source of income, adding a secondary unit can also increase the value of your home. By adding an additional living space, you are effectively increasing the overall usable square footage of your home. This can make your home more attractive to potential buyers and can increase its resale value.
Moreover, the addition of secondary units can also help to reduce the pressure on the housing market. As populations continue to grow, there is a need for more housing units to accommodate the growing demand. By adding secondary units, homeowners can help to free up additional housing for the growing population and reduce the strain on the housing market.
The $7,500 tax credit is a great incentive for homeowners to consider adding a secondary unit to their homes. However, it’s important to remember that there are also some potential drawbacks to consider. For example, adding a secondary unit may require significant renovations to your home, which can be costly and time-consuming. Additionally, you will also need to consider the costs associated with maintaining and managing the unit in the future, such as property taxes and utilities. The tax credit is also exclusive to multi-generational living, meaning a family member must occupy the suite first in order to qualify.
In conclusion, the new $7,500 tax credit for Canadians adding secondary units in their homes is a great opportunity for homeowners to make some extra money, increase the value of their homes, and support sustainable communities. If you’re considering adding a secondary unit to your home, be sure to carefully weigh the costs and benefits before making a decision – consult a tax professional and your REALTOR before you get started to make sure you’re making the best choice for you!