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What is Required for a Legal Basement Suite in Ontario?

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If you’ve been paying attention to real estate news over the past few years, you know that the rental market is one of the hottest markets. From bachelor apartments to two-bedroom apartments, the lack of affordable and suitable housing in some of GTA’s largest cities has created a need. That’s why many Ontario residents have begun to determine if their basement can be converted into a legal basement apartment. 

When it comes to basement apartments, there are a few things you need to consider before starting your renovations. In Ontario, certain codes and requirements must be met for your basement suite to be considered legal.

The most important things to consider include the egress (means of escape in case of fire), minimum ceiling height, windows, and smoke detectors. It is also important to note that a licensed contractor must complete any work done on your basement apartment.

What makes a basement apartment legal in Ontario?

In Ontario, a legal basement apartment is considered secondary suites that meet the requirements of the Ontario Building Code. If your property meets the zoning regulations for your neighbourhood and your building is more than five years old, your secondary apartment must meet the following requirements: 

  1. An area of at least 145 square feet.
  2. A ceiling height of at least 1.95 feet.
  3. Windows make up at least 5% of the living space and 2.5% of the bedroom area.
  4. Hot/cold water, sink, kitchen sink and access to the laundry room.
  5. The electrician’s office approves heating, cooling and electricity for electrical safety.
  6. At least 30 minutes fire separation between self and main unit. 
  7. Second escape route.

What building codes need to be met before renting your basement?

If you live in Ontario, your building must meet the standards of the building permits. If your building is a little older, hiring a property inspector or general contractor is best. They will tell you if any renovation work needs to be done on the space before considering building a basement apartment. 

Next, your building must meet fire code regulations to ensure the basement is safe to exit in an emergency. The fire department can do this inspection, but your basement apartment will not yet be legal even if you get their permission. Finally, you will need to comply with the specific bylaws in your municipality. For example, Toronto, Milton, Mississauga, Brampton, Burlington and Hamilton have special bylaws and procedures related to basement apartments. 

What are the costs of a legal basement in Ontario?

The cost of a finished basement will depend on the neighbourhood in which you live and the condition and layout of the basement. However, let’s take an unfinished basement as a benchmark and look at the basement repair cost in 2021. On average, the cost of a turnkey basement without a bathroom starts at $38,500 in Toronto. Remember that this is the cost of finishing the basement, not building a second home. 

When you consider that a second home requires a full bathroom, kitchen and other amenities, and bringing everything up to current building and fire codes, costs can skyrocket.

The cost will vary depending on your current situation, your area’s job rates, and the amount of structural work needed to complete the job. That’s why it’s always best to contact a trusted basement renovation company who can walk you through the process and work with you to design a space that will be legitimate and attract top-notch tenants. 

What are the pros and cons of a legal basement?

Pros 

  • A secondary source of income

Naturally, turning part of an existing home into a secondary source of income is one of the main reasons people do all this work. It can help you pay off your mortgage, pay off debt, or save more for the future.  

  • Increased property value

Repairing a second home is a proven way to increase the value of your property. Families in Toronto and Montreal are always looking for second homes to turn into nanny suites, sister-in-law apartments, or rentals.  

Cons

  • Less privacy

One of the most significant disadvantages of a basement apartment is that you will have less privacy as a homeowner. First of all, by renting out part of your home, you will essentially be living with a stranger in your own home. Also, if the noise insulation in your home is not good, you may hear them at all hours of the night. 

  • The cost of setting up the space

Basement apartments don’t come cheap. Converting the average unfinished basement into legal living space can cost you $75,000 (or even more). That’s a big investment, and it will take years to recoup the cost through rent.  

  • Being a landlord is not easy.

Once you rent out your space, you become a pseudo-landlord. This title comes with more stress and responsibility than you can imagine. If something is broken, you have to fix it; if something needs repainting, you must paint it. You also have to deal with tenants who may cause problems, be noisy, or cause significant property damage on rare occasions. You get the gist of it. It’s not worth the stress and headache for some people. 

  • Taxes

When renting a second apartment, you will have to pay income tax on the rent to the provincial government. Many first-time landlords don’t know this when they start the process, and things quickly get complicated. There are various ways to reduce your tax burden, and it is best to talk to a certified and trusted accountant who is familiar with the various exemptions and ways to reduce the tax on rental income.

Ready to renovate your basement?

The laws and bylaws regarding basement apartments are quite complex, but it doesn’t have to be for your basement remodelling project. Our renovation consultants can help you navigate the process and get a custom quote. Still in the brainstorming stage? Get inspired by our portfolio and some fun and functional basement apartment ideas

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