David Sacks/iStockPhoto / Getty Images
At 39 years old, Niya Bajaj is getting ready to live with her parents again.
In recent months the holistic yoga therapist has been preparing to travel to Mumbai to help her parents pack up their lives to move into her two-bedroom condo in Toronto. After living in India for the past decade, her parents, who are in their 70s, are about to retire and want to age in place “for as long as possible,” said Ms. Bajaj.
“When I return, we will start to find new rhythms,” Ms. Bajaj said.
The new living arrangement for Ms. Bajaj and her parents has become commonplace in Canada.
The number of multigenerational households have been increasing year over year. Statistic Canada’s 2021 census found that 2.9 per cent of private Canadian households were multigenerational. That’s 441,750 homes, up from 406,645 in 2016 – an 8.6-per-cent increase.
Should we help our son buy a home even though we’re on the verge of retirement?
There are several reasons for families pooling their resources into one home. One is affordability. The census found that the most expensive housing markets of Ontario and British Columbia had the most multigenerational households. The average rent for a two-bedroom apartment in British Columbia was $2,514 in March, 2026, and in Toronto, it was $2,462, according to Apartments.com.
Another reason is cultural. Herman Chan, certified financial planner and co-founder of Crimson Finance, pointed out how “in Chinese culture, you’re supposed to take care of your elders.” The census also linked many multigenerational living arrangements with immigrants who come to Canada from countries where multigenerational living is common.
If you’re planning to share your home with relatives, here are some of the key things to consider.
Make an agreement from the start
Mr. Chan says the first step is to sit down and talk about finances and how responsibilities will be split before moving in.
“Have an understanding of everyone’s financial situation,” he said. “Some of the expenses that could be shared right off the top would be rent or mortgage, and associated housing expenses like hydro, gas, groceries and water.” He also recommends revisiting these costs on an annual basis.
Ms. Bajaj and her parents haven’t had this conversation yet but they have historically shared finances. “It is likely that they will cover their travel, entertainment and medical costs while I continue to cover the core running costs like the mortgage, maintenance fees and basic groceries.”
Mr. Chan suggests that if family members work with advisers or planners, they should involve them to be a sounding board and seek help in organizing their expanded household’s finances.
Understand how it affects your taxes
Knowing how taxes are impacted becomes even more important depending on who owns the home and if rent is being paid, said Stefanie Ricchio, global commercial business strategist and CPA at SRBC Inc., a financial advisory firm in the Greater Toronto Area.
“If I move into my parents’ house, and I’m not on the title, nothing happens from a tax perspective,” she said. If you pay rent to your parents, it’s considered a deemed disposition based on change of use and that means your parents have to pay tax on the rental income.
Opinion: Add this to your retirement readiness checklist: TFSAs filled to the max
The next thing that happens, said Ms. Ricchio, is that the portion of the house that is now being rented is no longer your parents’ primary residence. In turn, this can create a tax situation where capital gains may have to be paid.
Under the Income Tax Act, they have sold part of their principal residence even though they didn’t actually sell it. The Act considers that each time the use of a property is changed – such as when your parents rent you a room, or vice versa – it’s been “sold” at fair market value and bought immediately for the same amount. That becomes the new tax cost. Ms. Ricchio says avoiding this type of situation is impossible and to talk to a tax expert to make sure the family doesn’t make this mistake.
Another option is to put everyone on the title of a home that’s already owned by a member of the family, but again that could trigger the deemed disposition change of use.
Still, Ms. Ricchio says there are definite tax advantages to multigenerational living, pointing out the refundable federal multigenerational home renovation tax credit. The renovation must be toward creating a secondary living unit. You can claim up to $50,000 in qualifying expenditures for each qualifying project completed. You get a tax credit of 14.5 per cent of your costs, up to a maximum of $7,250, for each eligible claim.
Prepare for the unexpected
Ms. Bajaj’s parents are in good health, so accessibility renovations won’t happen for the next five to 10 years. Right now, the family is figuring out how to find a balance living together.
“I think we will be working through personal guidelines for a while since neither my sister or I have lived with my parents as adults and we will have to get to know each other as human beings with different relationship dynamics,” Ms. Bajaj said.
“In addition we will have to puzzle out sharing the space since I actively see clients from my home, which requires confidentiality – something I’m looking forward to finding an architectural solution for.”
