The Pros and Cons of Living in a Multigenerational Home

Interested in growing closer to your family? Well, this may be the best option if you’ve considered living in a multi-generational home. It can’t be denied that times are tough on young people, old people and everyone in between.

Especially for those changing jobs or making their way out of university, the economy is a tough space. For this reason and many others, more and more families find themselves living underneath one roof and trying to make it work, together.

While most may not typically embrace this living arrangement, multi-generational homes have some definite benefits and offer a different quality of life.

Buying or setting up a multigenerational home could be an ideal solution for both your expectations and needs. However, alongside the benefits are some downsides that we’d like to point out in an examination of the pros and cons of living in a multi-generational household!

Living in a multigenerational home

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There are many types of multigenerational homes. Oftentimes in big cities, apartment building owners live in the same place as their kids, but each with their independent apartments. In the case of single-family homes, bear in mind that you’ll likely be sharing all common spaces. In some cases, maybe consider building a small addition in the attic or even the basement, allowing family members to stay close to each other, while still maintaining their privacy. 

Both of these options are great ways to keep family members nearby while offering everyone a little bit of privacy. However, do keep in mind that these options could be expensive, and may end up costing more than you can afford.

Another common multigenerational living situation is that someone will inherit a family home, without anyone necessarily passing on. As an example: the parents own a home that is too big for them. In contrast, their children, who have been living in apartments since they left, now realize they need more space.

With the idea that the house should stay within the family’s heritage, the parent could sell the home to their kids in order to earn some money so they can enjoy their retirement. In this instance, they would continue to live in the house but create a separate section for more privacy and intimacy.

Another major consideration when thinking about this living situation to consider is the amount of space necessary for yourself and your family. If you have several children, make sure to think about the space available in the home, and this should include the ratio of secluded space to common space and so on.

Living together: a good way to save money

When living in an intergenerational home, you have several advantages at your fingertips. Just to name a few, this living arrangement could mean saving on mortgage loans as well as accommodation costs, especially in the case where one of the family members previously rented their home. If your family situation comes down to finding support for an ageing generation, a multigenerational home can save serious costs when it comes to finding a nursing home. In addition, living together in the same house allows you to take advantage of interesting discounts on groceries. It is now possible to buy in large quantities, which is usually more economically advantageous.

Sharing everyday life

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Beyond economic considerations, the main objective of a multigenerational home is the fact that the family will be brought closer together. In most cases, all members of the family will be present and there to help each other when needed. As mentioned, if all relationships with your family are fairly comfortable, then it could make perfect sense to live in a multigenerational home.

Especially in relation to the rapid rise of technology, living with older generations can be a welcome reminder that turning off and logging out are important practices to foster. Furthermore, if you’re a young couple living with your parents and need a night to yourselves, you’ll luckily have the option of leaving children with their grandparents for a night of babysitting. Deepening the relationships between children, parents and grandparents can add an element of love and support that you wouldn't have in a single-family home.

This is even more beneficial for people suffering from a loss of autonomy or those who suffer from physical constraints, but are able to collaborate in other ways to daily family life. It shouldn’t come as a surprise that the main aspect that is keeping people from wanting to live in a multigenerational home is their fear of lacking privacy.

However, many people may not realize that these homes are usually made especially so that everyone has their own living space. We often see separate entrances and balconies that are independent one from the other. This small amount of separation allows people to be close whilst maintaining their own private lives.

The practical questions about living with several family members

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Living in a community-setting comes with its own whole set of challenges. Regardless of why your family may have decided to live in a multigenerational setting, this has positive economic as well as social implications. In order to keep things running smoothly between all members of the family, certain rules have to be established. Early on, it's important that everyone get together to participate in a conversation where certain potentially taboo subjects would be covered: money, sharing daily tasks, noise, freedom to move around from one part of the house to another, and so on.

In doing so, these subjects are less likely to turn into daily conflicts. Furthermore, consider all personal relationships in relation to this living arrangement. Do your parents get along with one another? Are you and your spouse on good terms? These may seem like an obvious question, but it is one that needs to be carefully considered before making this decision. 

The capital gain tax exemption: are you entitled to it?

While the sale of a principal residence usually entitles you to a capital gain tax exemption, this rule does not necessarily apply when selling an intergenerational home.

If the children are homeowners and the parents remain in the house as tenants, the section inhabited by the latter can be considered an ''income property''. In doing so, the exemption will not be granted. It is indeed preferable that all are owners, regardless of whether the house has two separate addresses or not.

Potential government subsidies for multigenerational homes

There is no tax credit or subsidy directly available for intergenerational home construction, but several types of credits are available for renovation as such or hosting parents. First, the governments of Quebec and Canada offer tax credits for property renovations.

Since 2009, it is possible to obtain a maximum of $2,500 in Quebec and $1,250 in Canada for a renovation in excess of $20,000. It is also possible to obtain a partial refund of the GST and QST during construction or during the purchase of a new construction. The same is true for a renovation that is considered to be major. However, the total construction price must not exceed $450,000 for the GST rebate and $225,000 for the QST rebate.

In the case of housing an elderly person, several tax credits are also available for the child who is housing a person over the age of 70 (or 60 in the case of a disabled person). In Canada, up to $4,198 can be obtained if the older person receives less than $18,534 per year.

In Quebec, two credits are available. A first of $581 for the simple act of hosting and a second of an additional $476 if the host receives less than $21,135 per year. In some cases, depending on the city, Renovation Québec may also offer grants for the addition of housing to your property.

*The information cited in this article was accurate at the time of the last update. Some of the programs mentioned may no longer be in place.