Are you a Canadian homeowner looking to add value to your home, or a first-time buyer looking for ways to make homeownership affordable? Adding a secondary suite could be the answer.
With government-backed programs and incentives now available across Canada, financing these renovations has never been easier. Whether you’re considering a basement suite, an in-law unit, or a backyard suite, secondary suites offer a fantastic way to maximize your property’s value while easing housing shortages in your community.
In this guide, we’ll dive into some of Canada’s top secondary suite incentive programs, covering everything from refinancing options to forgivable loans. We’ll look at province-specific incentives to help you find the best fit for your needs. Ready to see how a secondary suite could benefit you? Let’s jump right in!
Why Consider A Secondary Suite?
Secondary suites are more than just extra rooms—they’re fully self-contained units within or near your home. Think of a basement apartment, a separate in-law suite, or even a backyard studio. They’re becoming more popular across Canada, and here’s why:
- Extra Income Potential. A secondary suite can generate rental income, helping cover mortgage payments or renovation costs.
- Increased Property Value. Homes with secondary suites typically see higher market values, appealing to buyers looking for flexible spaces or income opportunities.
- Added Living Flexibility. Perfect for multigenerational families, independent adult children, or as a private space for guests.
- Housing Shortage Solution. Secondary suites are a creative way to address housing shortages in cities with limited rental options.
Thanks to support from both provincial and federal governments, financing a secondary suite has never been easier. Here’s everything you need to know about the programs available to help you get started.
Refinancing For A Secondary Suite
For existing homeowners, refinancing is one of the most accessible options for funding a secondary suite without the hassle of taking out a new loan. With mortgage refinancing, homeowners can access up to 90% of the loan-to-value (LTV) of their home for secondary suite construction or improvements. This approach allows you to tap into your home’s equity, which can be used to cover the full or partial cost of a secondary suite without dipping into your savings.
Refinancing is especially appealing for those planning to rent out the suite, as the potential rental income can help cover the new loan payments. And with new federal measures introduced in 2024, refinancing for secondary suites has become even simpler for Canadian homeowners.
Secondary Suite Incentive Programs Across Canada
Most provinces in Canada have a tailored secondary suite incentive program to meet the unique housing demands of their regions, making it easier for homeowners to create or improve rental spaces. Let’s explore the primary secondary suite incentive programs across Canada:
| Financial Support | ||
| Calgary, Alberta Secondary Suite Incentive Program | Receive up to $10,000 | Learn More |
| Hamilton, Ontario Ontario Renovates Secondary Suite Forgivable Loan Program | – Forgivable loan – Receive up to $50,000 | Learn More |
| British Columbia Secondary Suite Incentive Program | – Forgivable loan – Receive up to 50% of renovation costs, up to $40,000 | Learn More |
| Newfoundland & Labrador Secondary Basement Suite Incentive Program | – Forgivable loan – Receive up to 50% of renovation costs, up to $40,000 | Learn More |
| Nova Scotia Secondary and Backyard Suite Incentive Program | – Forgivable loan – Receive up to 50% of renovation costs, up to $40,000 | Learn More |
1. Calgary, Alberta – Secondary Suite Incentive Program
Calgary’s Secondary Suite Incentive Program provides up to $10,000 to homeowners who want to add a rental suite to their property. As one of Canada’s fastest-growing cities with high rental demand, Calgary has designed this program to help with expenses associated with registering and creating or renovating a secondary suite to meet city standards.
This program’s flexibility is a huge plus—it can cover a range of costs from design and engineering fees to construction expenses. Whether you’re starting from scratch or improving an existing suite, Calgary’s program makes the process easier by offering financial assistance to cover these costs. For new and experienced landlords alike, Calgary’s initiative supports the growth of rental housing in the city’s tight market.
2. Hamilton, Ontario – Ontario Renovates Secondary Suite Forgivable Loan Program
Ontario has made a substantial effort to promote affordable housing through programs like the Ontario Renovates Secondary Suite Forgivable Loan Program. Available in cities such as Hamilton, this program targets homeowners who want to add or improve a secondary suite.
The program works by offering a forgivable loan of up to $50,000 that may cover a significant portion of the renovation costs, provided the homeowner meets certain conditions. For example, as long as the suite is kept affordable for renters, the loan may not have to be repaid. This is a fantastic option for homeowners who want to add a secondary suite without taking on the entire financial burden themselves. Hamilton’s program is also helpful in guiding property owners through the city’s regulations, ensuring all suites meet safety and livability standards.
3. British Columbia – Secondary Suite Incentive Program
British Columbia’s Secondary Suite Incentive Program is tailored to meet the unique needs of its high-demand housing market, particularly in cities like Vancouver. With some of the highest property prices and rents in Canada, BC’s program is designed to encourage homeowners to add rental spaces and alleviate housing shortages.
The program provides financial support to cover a range of expenses related to secondary suite renovations, including construction, permitting, and ensuring that suites meet provincial building codes. Eligible applicants can receive up to 50% of renovation costs, up to $40,000. Moreover, this loan is forgivable if the homeowner adheres to certain conditions such as renting out the suite below market rates for at least 5 years.
This incentive is attractive to both urban and suburban homeowners who want to add value to their properties while addressing housing challenges. As a result, the program helps balance housing availability in BC’s tight market.
4. Newfoundland & Labrador – Secondary Basement Suite Incentive Program
In Newfoundland & Labrador, the Secondary Basement Suite Incentive Program is focused on creating basement suites, a popular choice for secondary housing units. This program is tailored to homeowners interested in creating rental spaces within existing basements, making it a cost-effective solution that doesn’t require additional building space.
Eligible homeowners can receive up to 50% of renovation costs, up to $40,000. Moreover, the loan is forgivable if homeowners follow all the required conditions when renting out the suite. If you meet the conditions, the loan and interest will be forgiven at a rate of 20%, up to $8,000 each year.
By offering financial support for construction and any upgrades needed to bring suites up to code, Newfoundland & Labrador’s program helps homeowners make the most of their properties and create additional rental options. This incentive program is particularly beneficial for people who want to increase their home’s functionality and value while also helping with the housing shortage in Newfoundland & Labrador.
5. Nova Scotia – Secondary and Backyard Suite Incentive Program
Nova Scotia’s Secondary and Backyard Suite Incentive Program is one of the most versatile, supporting both traditional secondary suites (such as basement or in-home units) and backyard suites. This program is ideal for a variety of property types, from urban homes to rural lots with more space for backyard suites.
This incentive covers a wide range of costs, from design and planning to construction and necessary upgrades. It’s a solid option for homeowners looking to maximize their property’s potential while creating rental opportunities. The backyard suite option is especially appealing for those in suburban or rural settings where building regulations favour detached units, offering additional flexibility to homeowners.
How To Choose The Right Program For You
With so many secondary suite incentive programs available, selecting the right one may feel overwhelming. Here are some quick tips to help you decide which program suits you best:
- Location: Each program is specific to its province or city, so start by researching the programs that are available in your area.
- Budget: Determine your renovation budget and how much financial assistance you’ll need. Some programs cover more costs than others, so finding a program aligned with your budget is key.
- Suite Type: Consider whether you want a basement suite, in-home unit, or a backyard suite, as some programs cater specifically to certain suite types.
- Eligibility Requirements: Many programs have specific eligibility criteria, such as income levels or rental conditions. Ensure you meet these requirements before applying.
- Long-Term Goals: Think about whether you plan to rent the suite long-term or use it primarily for family. Forgivable loan programs often come with long-term rental requirements, so choose a program that aligns with your plans.
Choosing the right program can maximize the financial benefits available and make the process of creating a secondary suite more manageable.
Beyond Income: Additional Benefits Of Adding A Secondary Suite
Secondary suites offer more than just rental income or added property value. Here are some of the other valuable benefits:
- Multigenerational Living: With rising housing costs, many families are opting for multigenerational living arrangements. A secondary suite allows family members to live together while maintaining privacy and independence.
- Increased Property Marketability: Properties with secondary suites are attractive to buyers looking for income-generating opportunities, increasing the marketability of your home.
- Sustainable Development: Secondary suites contribute to sustainable housing by using existing infrastructure and reducing the need for new construction. This can lower environmental impacts and promote eco-friendly living.
- Support for Affordable Housing: By creating rental spaces, you’re helping to increase housing availability, supporting local communities, and contributing to affordable housing solutions.
The Future of Secondary Suites In Canada
With housing shortages and affordability challenges in mind, the Canadian government has shown a commitment to supporting secondary suite development through various programs. As housing demands grow, the role of secondary suites in Canada’s housing strategy will likely become even more prominent. These suites are no longer just a way to increase property value—they’re a strategic response to housing challenges across the country.
By investing in a secondary suite, you’re gaining a versatile space that can adapt to your family’s needs while providing financial benefits. And with incentive programs available, the process has never been easier. Whether you’re looking for extra income, increased property value, or a practical solution for family living, a secondary suite could be just what you need to take your property to the next level.
So, if you’re considering a secondary suite, check out the programs available to you. Not only could it open up new financial opportunities, but you’ll also contribute to your community’s housing options. Secondary suites are more than just an upgrade; they’re an investment in your property, your financial future, and your community.
