Thinking of renting your basement to make extra money?

Real Estate Agent

The Greater Toronto Area is premier destination for many new immigrants and the population of this region is expected to grow to 4 Million people by 2030. Mississauga alone takes approx. 35,000 new immigrants every year. Also Region of Peel has the longest waiting list for social housing in Ontario, upwards of nine years. To meet this annual growth in population and affordable housing needs, options like Second Units, also known as basement apartments or in-law suites have been identified as a way to provide healthy and safe housing choices to households, with affordability issues. With the average cost of a detached home in Mississauga now at $713,000 and increasing every year, second units are also a part of the City’s Affordable Housing Strategy and Action Plan. As well, second unit are also an excellent opportunity for home owners to realize extra income.

The Ontario government’s Bill 140 mandated that all Ontario municipalities pass by-laws to make second units legal. 1st municipality to address this issue is Mississauga to pass a second Units by-law effective January 2, 2014, second units became legal in the City of Mississauga. If you are renting your basement or second unit, you are required to have a license and only one second unit is permitted in any dwelling

The classes of licensing for second units with their associated fees are here below:

1. Owner Occupied – Licensing Fees – Initial $500 & Renewal $250

2. Investment Dwelling – Licensing Fees – Initial $1000 & Renewal $500

To qualify for above licenses, second units must meet certain criteria as below:

1. Permitted in single detached, semi-detached and townhouses.

2. Must comply with .Zoning By-Law regulations, Ontario Building Code, Ontario Fire Code and all applicable municipal by-laws.

3. Must have a separate entrance and a dedicated parking space and only 1 driveway.

4. Cannot occupy more than 50% of the gross floor area (GFA) of a dwelling and the minimum GFA must be 35 square meters.

5. Owners must carry $2 million in liability insurance.

Failing to comply with above by-laws, there can be penalties as high as $25,000 for Owners & as high as $50,000 for Corporations, associated with properties found non compliant.

There are other cities in GTA, which are also seriously working with their local residents for getting this law implemented. Like City of Brampton, currently have undertaken a Second Units Policy Review to establish a policy framework for permitting second units across the city. To support the policy review, extensive public consultation is undertaken to engage. Local residents need to understand that Municipal authorities can’t alone decide about implementing this law, more local residents should be attending these open house sessions, public workshops and a statutory public meeting, which will help in speeding up this process.

Comments (2)

Kat Palmiotti
406-270-3667,, Broker/REALTOR® - Kalispell, MT
Helping your Montana dreams take root

Interesting that there is a NINE year wait for affordable housing!  Yikes.

Nice overview of the requirements/rules/penalties for licensing second units.

Jan 08, 2015 10:06 PM
RVA HomePRO Michael Hottman
RVA HomePRO Realtor with Keller Williams serving Hanover, Henrico, Chesterfiled and Richmond, Virginia - Glen Allen, VA
Helping you achieve goals in life & real estate

Ah, this explains Scott McGillivray's show Income Property. I wondered why so many people were converting basements and such into separate residences.

Jan 09, 2015 09:45 PM