Updated September 2026
Whether you are buying a home with a basement apartment, adding a suite for family or looking for rental income, Ontario's rules for what the province calls additional residential units have changed a lot in the past few years. Here is what is allowed, what still needs approval, and what to check before you buy a home that already has one.
What Ontario now allows
Under the More Homes Built Faster Act, 2022 (Bill 23), most residential lots in urban areas with full municipal water and sewer services can have up to three units without a rezoning:
three units in the main house, or
two units in the main house plus one in a separate building, such as a garden suite or a unit above a detached garage.
According to the province's Environmental Registry notice, municipalities can't set a minimum size for these units, are limited in how much parking they can require, and generally can't charge development charges or parkland fees for them. In 2024, the province also gave itself more power to override other local zoning barriers to these units.
Rural properties and lots without full municipal services follow different rules, so check the local official plan.
What still needs approval
Allowed without a rezoning doesn't mean allowed without permits. Before a unit can be used, you still need:
a building permit, because the Ontario Building Code sets requirements for things like fire separation, exits, ceiling heights and smoke and carbon monoxide alarms
an Electrical Safety Authority notification for the electrical work
compliance with the Ontario Fire Code
Some municipalities also ask owners to register the unit, and local zoning still controls things like setbacks and the size of accessory buildings.
Buying a home that already has a second unit
Ask how it was built. Find out whether the unit was built with permits and, where it applies, registered with the municipality. Our guide to buying a home with unpermitted renovations explains how to check.
Talk to your lender early. If you want to use rental income to qualify for your mortgage, your lender may ask for proof that the unit is legal, along with the lease.
Understand existing tenancies. A tenancy doesn't end just because the home is sold. Talk to your lawyer about the notice rules before your offer is firm.
Tell your insurer. A rental unit changes your insurance needs.
Adding a unit to your own home
Start with your municipality's building department to confirm what is allowed on your lot. Have drawings prepared by a qualified designer, apply for the building permit, file the ESA notification and book inspections as the work goes. Get quotes before you commit, because fire separation, a separate entrance and plumbing work can add up.
Local rules in York Region, Simcoe County and Durham
Each municipality publishes its own guidance on second and third units, so check with the town before you buy or build. Our community guides are a good starting point for comparing towns, or call us at (905) 830-9111 and we can help you look at a specific property.
