THE RISE OF MULTI-GENERATIONAL LIVING

Once seen as a last resort, multigenerational living is now a choice many families willingly make. A growing number of Canadians are embracing this lifestyle, with homes occupied by three or more generations increasing by 45% over the past two decades, according to Statistics Canada. By 2021, over half a million children lived with both parents and grandparents.¹

This trend has gained popularity as younger generations face higher housing costs, while seniors opt to age in place. With home prices continually outpacing incomes, many first-time buyers are considering co-buying with family or friends.²

• Cultural factors also play a role. Multigenerational living is especially common among Indigenous and immigrant families, where it aligns with traditional family values. Psychiatrist Dr. Shimi Kang explains, “As Canada becomes more multicultural, multigenerational homes are becoming the norm, beyond just financial reasons.”³ ⁴
• For many families, the benefits are substantial: shared finances, childcare, and household responsibilities create a built-in support system.
• Studies even show that those living in multigenerational homes tend to be healthier, live longer, and enjoy greater financial security.⁵

That said, multigenerational living can be challenging. Success hinges on choosing a home that suits everyone’s needs, offering space and privacy for all family members.² ⁶

Here’s a deeper look at multigenerational living, along with tips for selecting a home that fits a diverse household.

WHAT TO CONSIDER BEFORE SHOPPING FOR A MULTIGENERATIONAL HOME

Before starting your home search, gather as a family to align on your goals. Have you clarified what you’re looking for? Are there agreed-upon compromises? Are there any lingering concerns? Defining your “why” for buying a multigenerational home will help:

• For some, it’s about caring for relatives and sharing responsibilities.
• For others, it’s pooling resources to afford a better property or cut costs on childcare and senior living.

For homeowner Jennifer Durocher, co-owning with her husband’s parents allowed them access to a family-friendly neighborhood that would have otherwise been out of reach. Initially, she and her husband had planned to buy separately, but they struggled to save a substantial down payment. Meanwhile, her in-laws were ready to downsize, and by combining efforts, both households saved money.⁶

Homeowner Surjit Singh, who immigrated to Canada in 2018, bought a home with his extended family in 2021, just before inflation drove up prices. “Living together, you can share everything,” Singh told the CBC, highlighting the financial resilience that came from co-ownership.⁷

Beyond your immediate needs, consider long-term issues like accessibility and budgeting.

• For example, if some family members are nearing retirement, think about whether features like steep stairs could become a challenge over time.
• Similarly, while a luxurious home may appeal initially, it may also require a larger long-term budget for maintenance and upkeep.

If these conversations haven’t happened yet, set a date to discuss them as a group. I can assist by interviewing family members individually and advising on what’s realistic in today’s housing market.

WHAT TO LOOK FOR IN A MULTIGENERATIONAL HOME 

Once you’ve identified your family’s needs, the next step is to create a joint budget to understand what you can afford, not only for the purchase but also for maintenance.

Consider a home’s size and layout as well. Ample space for privacy is generally more practical for multigenerational living, especially with young children involved.⁶ However, the ideal layout and square footage also depend on family members’ personalities; while some may be comfortable sharing close quarters, others might need more personal space. Possible housing options include:

• A large home with multiple rooms and at least one ensuite bathroom
• A home with an accessory dwelling unit (ADU), such as a basement apartment
• A multifamily unit, like a duplex

Architect Allison Holden-Pope recommends choosing units with separate entrances when possible, allowing each generation a sense of personal space. “Having a sense of identity in your own place is still very important,” she told Today’s Parent.⁶

For families looking to age in place, a ground-floor unit or at least a main-floor bedroom and bathroom may be ideal. Consider also whether the home can accommodate future caregivers, suggests Holden-Pope.⁶

Alternatively, you might look for a home that can be expanded or retrofitted into multiple units. While adding a new unit or renovating is an investment, the Multigenerational Home Renovation Tax Credit may help offset costs.⁸ This Canadian tax credit helps families cover the cost of home renovations to create a secondary living unit for an elderly family member or adult with a disability.

Key Details of the Multigenerational Home Renovation Tax Credit:

• Eligibility: Applies to families building a separate living space for a senior (65+) or an adult with a qualifying disability.
• Credit: Covers 15% of renovation costs, up to $50,000, offering a maximum tax savings of $7,500.
• Eligible Costs: Includes expenses directly tied to renovation (labour, materials, rentals, professional fees), excluding general upkeep or non-essential upgrades.
• Requirements: Renovations must include essentials for a self-contained unit—separate entrance, kitchen, and bathroom.

During property visits, I can help you evaluate potential expenses and determine whether a home is a wise investment. I can also connect you with a trusted contractor experienced in renovations.

HOW TO BUY A MULTIGENERATIONAL HOME

Buying a home with family can be complex, especially when applying for a joint mortgage. Surprisingly, qualifying as a group is sometimes easier than applying solo.⁹ Furthermore, you don’t have to split the mortgage evenly:

• A tenants-in-common mortgage allows each member to own different portions of the property—for instance, one person could cover two-thirds of the mortgage, while another pays one-third.⁹
• A joint tenancy mortgage, on the other hand, divides responsibility equally among co-borrowers.⁹

Consult with a lender or broker to determine the best option for your situation; I can connect you with a knowledgeable professional.

Credit is crucial to qualifying for a mortgage, so have everyone check their credit reports and scores early. Reviewing your credit can reveal correctable issues, such as report errors or high card balances, which can impact your buying power.¹⁰

As a family, consider these questions:

• Who will be on the mortgage and title?
• Would including everyone improve your mortgage rate?
• Can those with lower credit still contribute financially?
• Be mindful of potential tax, estate planning, and “what-if” scenarios, such as family members opting out. If that happens, refinancing may be necessary, potentially at a higher rate.⁹

For professional guidance, I can refer you to a legal or tax advisor.

BOTTOMLINE

Multigenerational home buying is gaining popularity as a way to pool resources, enhance well-being, and reduce loneliness.⁵ If you’re interested in exploring this lifestyle, reach out. I’d be happy to help you envision your own full house.

The postings on this site are my own and do not necessarily represent the positions, strategies or opinions of Bosley Real Estate Ltd., Brokerage. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, insurance, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources: 

1. Statistics Canada – https://www150.statcan.gc.ca/n1/daily-quotidien/220713/dq220713a-eng.htm 
2. The Walrus – https://thewalrus.ca/multigenerational-living-often-makes-sense-that-doesnt-make-it-easy/  
3. Vanier Institute of the Family – https://vanierinstitute.ca/resource/sharing-a-roof-multigenerational-homes-in-canada-2021-census-update/ 
4. HuffPost Canada – https://www.huffpost.com/archive/ca/entry/three-generation-homes_ca_5cd4f84ce4b07bc729739712 
5. SSM – Population Health – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769098/ 
6. Today’s Parent – https://www.todaysparent.com/family/family-life/multi-generational-homes/ 
7. CBC – https://www.cbc.ca/news/canada/british-columbia/canada-bc-multi-generational-housing-affordable-1.7134448 
8. Realtor.ca – https://www.realtor.ca/blog/understanding-canadas-multigenerational-home-renovation-tax-credit/30088/1362 
9. The Globe and Mail – https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-multi-generational-living-is-getting-more-common-heres-how-to-share/
10. Financial Consumer Agency of Canada – https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score.html