Can I Turn My Basement or Backyard Into a Legal Rental Suite in Toronto?

Yes, both are legal in most of Toronto. Basement apartments have been allowed citywide since 2012, and most residential lots can also carry a detached garden suite in the backyard. The catch is that both need a building permit, and both have to pass the Ontario Building Code before a tenant moves in. Skip that part and you are running an illegal unit, which gets ugly fast if there is a fire, a bylaw complaint, or an insurance claim.

Basement suite: the basics

Converting a basement into a legal second suite is the cheaper path for most homeowners. Here is what the city will look for:

• A building permit with drawings showing the new layout
• A separate entrance, or at least access to an exit without walking through your unit
• Fire separation between your unit and the suite, plus interconnected smoke and CO alarms
• An egress window in every bedroom, sized for escape
• Minimum ceiling height, which trips up a lot of older houses with low ducts and beams

The honest tradeoff: basement suites rent fine in Toronto, but they are dark. And if your basement has ever leaked, fix that first. Waterproofing runs $4000 to $12000 on a typical job, and no tenant wants to move a bed into a damp room.

Backyard suite: the basics

A garden suite is a small detached building, usually one or two bedrooms, built behind your house. The rules worth knowing:

• One garden suite per lot, on a residential street
• You cannot sever it off or sell it separately. It stays tied to your property.
• It needs its own water, sewer, and hydro connections, and that tie-in cost swings a lot depending on where your services run
• Setbacks from property lines and tree protection rules decide how big it can actually be

Be straight with yourself about the tradeoff here too. A garden suite costs far more per square foot than a basement reno, and you lose yard. What you gain is light and privacy a basement tenant will never have, and garden suites rent well because of it.

What it costs, in plain numbers

There is no flat price for either one. The line items stack:

• Basement suite: waterproofing if the space needs it ($4000 to $12000), a full bathroom ($12000 to $28000), and a kitchen or kitchenette. A small kitchenette comes in under a full kitchen, which we price at $25000 to $65000. Add permits, fire separation, flooring, and doors on top of that.
• Garden suite: think small house. Roofing ($5500 to $12000), siding, soffit and fascia ($3000 to $9000), eavestroughs ($2000 to $4800), and a small entry deck, which sits at the low end of our deck and porch range ($8000 to $25000). The big variables are the foundation, framing, and servicing.

Two things before you rent either one

Tell your insurer. An undisclosed rental unit can void a claim, and that is not a fun surprise. Also expect your property taxes to be revisited once there is a second dwelling on the lot. Being a landlord is a real job with real paperwork, so go in knowing that.

Why fall is the time to start

Permits take time. A basement suite permit usually takes weeks. A garden suite can run a couple of months once the drawings are done. Start the process this fall, break ground when the frost is out, and you can have tenants in before next winter instead of losing another year of rent.

We have been doing this work around Toronto since 1979, and we will tell you straight whether your lot is better suited to a basement suite or a garden suite. Get a free ballpark at lfbuilders.ca/costs/calculator.