Are you thinking about buying a single family home with a basement apartment?
For many Ontario homebuyers, basement apartments offer attractive benefits, from generating rental income to providing long-term flexibility for family living or future resale.
What is a Single Family Residence?
A single-family home or residence is a detached dwelling that is not connected to any other structure (except its own garage or shed). It has open space on all sides and no dwellings either above or below it.1
What is a Basement Apartment?
A basement apartment or unit is considered a second unit if it is a separate, self-contained living space within a house. That means it has its own kitchen, bathroom, and sleeping area.2
What Happens When The Property is Zoned as a Single Family Residence?
In the past, rules often limited or even prohibited basement units in homes zoned as single-family residences. However, with Ontario's More Homes Built Faster Act ("Bill 23"), the rules are shifting to give homeowners more freedom to add or keep basement units.
How the Act Is Transforming Housing Rules
The More Home Built Faster Act, also known as Bill 23, came into effect in 2022, as part of a long-term strategy to help build homes and make life more affordable for Ontario families.3
Before Bill 23, municipalities had wide discretion to regulate and often restrict secondary units through local zoning bylaws. For example, they could:
- Prohibit secondary units in certain residential zones,
- Impose minimum lot sizes,
- Require additional parking spaces,
- Limit where and how units could be constructed.
With the introduction of Bill 23, the rules are changing. The legislation limits a municipality's ability to restrict or prohibit basement units. Without these limits, the potential for buyers to legalize and use secondary units is made simpler.
Bill 23 introduced key amendments to the Planning Act that make it easier for homeowners to add extra residential units. Specifically, the law now permits:
- Two units inside a house (such as a main unit and a basement apartment),
- One unit in a separate building (such as a garden suite or laneway house), as long as the main house has no more than two units,
- Or three units total inside the main house, if there is no extra building being used.4
Development Charges Act
In addition to planning changes, Bill 23 also introduced key amendments to Section 2 of the Development Charges Act, aimed at reducing costs for adding residential units:
- There is now a clear exemption from development charges for multiple units (up to three) added to a detached, semi‑detached, or rowhouse.
- This means homeowners can build secondary units more affordably, although other codes and permit requirements still apply.5
What This Means for Buyers
If you're purchasing a property that is described as a single-family home but has a basement apartment, the More Homes Built Faster Act may work in your favour. The addition of residential units offers financial benefits to property owners and supports efforts to increase housing availability.
What you should keep in mind:
Check Legal Status:
- Not all basement units are legal, even with Bill 23 in place. You will still need to verify that the unit meets building code, fire safety, and municipal property standards.
Municipal Bylaws Still Apply:
- While municipalities can no longer outright ban secondary units, they can still regulate certain aspects, such as parking, unit size, and servicing capacity.
Conclusion
If you are buying a single-family home with an existing basement unit, the More Homes Built Faster Act may make it easier to legalize or use that unit. While zoning is no longer the obstacle it once was, compliance with safety and building standards is still essential.
Bill 23 is part of a larger shift in Ontario housing policy, one that increasingly supports multi-unit living on traditional single-family lots. As a buyer, understanding these new rules can help you make a more informed decision and unlock the full potential of your new home.
This blog was co-authored by summer law student Emma Wilson.
Footnotes
1. Statistics Canada. Classification of Residential Structures. https://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=144257&CVD=144258&CLV=0&MLV=2&D=1
2. Government of Ontario. Add a Second Unit in Your House. https://www.ontario.ca/page/add-second-unit-your-house
3. Government of Ontario. More Homes Built Faster Act, 2022. https://news.ontario.ca/en/backgrounder/1002525/more-homes-built-faster-act-2022
4. Planning Act, R.S.O. 1990, c. P.13, s 16(3)
5. Development Charges Act, 1997, S.O. 1997, c. 27, s 2(3.2)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
