An intergenerational home is not a new idea, but it's a way of life that's attracting more and more Quebecers.
What is an intergenerational home?
This type of property brings together multiple generations, often parents and children, under one roof in separate but connected living spaces. More than just a shared living arrangement, an intergenerational home fosters mutual support, knowledge sharing, and stronger family bonds.
Benefits of intergenerational home
A haven for seniors and children
For aging parents, an intergenerational home offers a secure and comforting environment. Close proximity to their children and grandchildren provides constant companionship and assistance with daily tasks, reducing feelings of isolation.
For younger generations, it's a great way to strengthen family ties and create precious memories by spending quality time with their parents or grandparents. What's more, children can learn more about their grandparents' lives. Then, they'll have the chance to cultivate new knowledge and skills.
A stepping stone to home ownership
An intergenerational home can be a stepping stone to homeownership for younger generations. By sharing the costs of purchasing and maintaining a property, the financial burden is significantly reduced, making it more accessible to buy a home.
An alternative to senior living facilities
Often seen as impersonal and cold, senior living facilities may not be everyone's first choice. Intergenerational homes offer a warmer, more personal alternative, allowing seniors to remain in a familiar environment while enjoying the company and support of their loved ones.
Cost savings
Beyond the social benefits, intergenerational homes offer significant financial advantages. By sharing common expenses such as utilities, homeowners can reduce their overall costs. Additionally, having an extra set of hands can be invaluable, especially for families with young children, as it can reduce childcare costs.
Government incentives
Various government programs and incentives are available to assist families in financing the construction or renovation of an intergenerational home. These programs can cover a portion of the costs for renovations, adaptations, or the installation of specific equipment.
Here are some grants and financial assistance:
- Multigenerational home renovation tax credit (MHRTC)
- GST and QST Rebate for Owners of New or Substantially Renovated Housing
- Affordable Housing Renovation Program
- Residential Adaptation Assistance Program
- Municipal programs
Does the capital gains tax exemption apply to an intergenerational home?
It depends. It's a rather complex question as the taxation of an intergenerational property can be quite intricate.
When selling a primary residence in Canada, sellers are generally entitled to a capital gains tax exemption. However, for the sale of an intergenerational home, the capital gains tax exemption is not automatically applicable. Several factors must be considered, including the specific configuration of the property and the municipal regulations where it is located. If the property does not meet municipal requirements, you may lose out on tax benefits, which could result in significant financial implications. It's therefore essential to consult with your real estate agent to understand the specific requirements of your municipality.
Furthermore, tax authorities will examine the financial relationship between parents and children. If both generations are owners and the property has two separate addresses, each may be eligible for the exemption for the space they occupy in the home. However, if the residence consists of two separate dwellings and only one generation is the owner, they may not be eligible for the exemption for the entire property.
Additionally, if one generation pays rent and lives in a separate space, the property will be considered a "rental property." In this case, the owner will not be able to claim the exemption when selling.
A growing trend
Intergenerational homes address the growing demographic challenges of an aging population and rising housing costs. It offers a sustainable and fulfilling lifestyle that benefits all generations involved. If you're considering an intergenerational home, it's important to carefully plan and consider the unique needs and desires of each family member.
If you're thinking of setting up an intergenerational home, it's important to get the facts right and take the time to think about your needs and expectations. Contact one of our brokers if you have any questions.
