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Secondary Suite Incentives and Financing in Canada: What's Available Now

Updated

Adding a basement apartment, laneway home or garden suite can create rental income and more housing. This page lists the government help that exists now, what has ended, and what financing a suite costs each month. Rules and programs vary a lot by province and city, so check with yours before you build.

Federal programs

  • CMHC insured refinance: since January 15, 2025, homeowners can refinance up to 90% of the as-improved value (below $2 million) to add units, with up to 4 units in total (CMHC). This is a loan you repay as part of your mortgage.
  • GST/HST new residential rental property rebate: 36% of the GST, or the federal part of the HST, up to $6,300, on a newly built or substantially renovated unit rented out long-term. The full rebate applies up to a fair market value of $350,000, shrinking to none at $450,000 (CRA).
  • Canada Secondary Suite Loan Program: cancelled before launch. See what happened to it.
  • Canada Greener Homes Loan: closed; funding is fully committed and new applications can’t be approved.

Provincial rules and programs

  • Ontario: since November 28, 2022, the Planning Act allows up to 3 units per lot as of right in many residential areas with full municipal water and sewer: three in the main building, or two in it and one in a building such as a garage. Municipalities can’t require more than one parking space per unit or charge development charges on the second and third units (Ontario).
  • British Columbia: the provincial pilot secondary-suite incentive program stopped accepting applications after March 30, 2025, citing “uncertain financial times” and the federal program then planned (BC).
  • Other provinces: zoning and any grants are set locally. Ask your municipality’s planning or building department what’s allowed and whether it offers help.

What financing a suite costs each month

Borrowing through a refinance adds to your mortgage payment. At the Bank of Canada’s average rate on new uninsured 5-year fixed mortgages, 4.49%, over 25 years:

Added to the mortgageExtra monthly paymentExtra interest over 25 years
$50,000$276$32,938
$100,000$553$65,875
$200,000$1,106$131,750

An insured refinance also adds CMHC’s premium, and your own rate may differ. Rent from the suite is taxable income, and you can deduct the related expenses; ask a tax professional how a suite affects the principal residence exemption when you sell. Rental income and mortgage qualification explains how lenders count suite rent.

A legal suite needs a building permit, has to be allowed by your municipality’s zoning, and must meet the provincial building and fire codes. Requirements such as ceiling height, fire separation, exits and parking differ by province and city, so get them from your building department before you design the suite. An unpermitted suite can cause problems with insurance and with lenders.

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Sources

The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 2, 2026. How we check facts.