With the economic situation we find ourselves in, all Canadians are looking for ways to bring in extra income. One option is to put your home equity to work. Converting your basement into a legal income suite is a great step to take. To help fund this, you can take advantage of HELOC (home equity line of credit) to fund the changes to your home.
Zoning & Regulations
Know how your home is zoned. In recent years, there has been an easement for allowing more zoned areas to have suites.
We typically find these regulations on your province’s official municipal website, which specify the amount of space that can be allowed to be turned into a suite. Most R zoned areas have been expanded to have easier regulations to have a suite in your home. In some areas, even townhomes can be allowed this opportunity.
Insurance & Legal Considerations
Speak to your insurance provider about what options they offer about coverage for your secondary suite. Shop around for other offers that may extend benefits to both you and your potential tenants.
Another important step is to talk to a lawyer about lease and rental agreements. Also, double check to see if there are specific mandatory standards that your area may require, such as in Ontario.
Unit Layout and Design
Now that you know the allowed space, size restrictions and ceiling height requirements, you may plan out the design and look of your secondary suite.
The following are must have for your unit at a minimum:
A separate parking space for the renter.
A separate entrance, kitchen, bathroom, and living/sleeping areas.
Ventilation and soundproofing measures to enhance livability.
Consideration of natural light.
Interlink smoke detectors for primary and secondary residences.
Separate, independently controlled ventilation and heating system.
Proper drainage, sewage connections, and utility separations.
Outlets, circuits, and lighting that meet electrical code requirements.
When hiring the appropriate building, plumbing, and electrical experts, ensure that your suite is up to code so that you can avoid any potential disasters.
Building & Trade Permits
Now that you have your design and have found the right professionals for the job. The other important thing to take care of is getting your building & trade permits. Most areas require these permits to be considered legal, although some areas do not. But it is important to acquire such permits for your insurance and to protect your investment.
Inspections & License
Before everything gets started, you must keep in mind what inspections must be done and when. Some are required at specific times during the process, so schedule them accordingly with the local authorities to ensure compliance with building codes, fire safety standards, and health regulations.
Once your suite has met all needed requirements and has been approved, the final step is to determine if you are required to have a business license. Depending on your situation and location, this may not be necessary, but several factors can determine if a license is needed. Such as, if you would be staying in the primary suite area, the time of the rental, and others. Check these requirements with your local area to be sure.
Incentives
Aside from earning extra income per month, there are several additional government incentive programs for suites, such as:
Multigenerational Home Renovation Tax Credit: A credit for a renovation that creates a secondary unit within the dwelling to be occupied by the qualifying individual or a qualifying relation. The value of the credit is 15% of the lesser of qualifying expenditures and $50,000.
Ontario: There are multiple secondary suite programs throughout Ontario, depending on your region. These loans provide $25,000 to $50,000 in funding and are forgivable, assuming continuous ownership for 15 years.
Most, if not all, of the information required to get your second suite project going can be found online. It is always good to visit your local authorities and double check the information. Never hurts to ask and be 100% sure. For more information or if you have any additional questions feel free to contact us.
