This month we are covering what you need to know about converting your basement into an income suite, plus we have some fun summer BBQ tips!
With the current interest rates and economic scenarios, many Canadians may be looking for ways to bring in some extra cash. One option for this is to put your home equity to work and consider renovating your basement into a legal income suite! You can do this by using a secured credit line (home equity line of credit or HELOC) to help fund the upfront cash to make changes to your home.
A few things to consider before you invest in renovating to create an income suite include:
A few examples of how the regulations can differ between provinces or cities include:
In Coquitlam, you cannot have a suite that is more than 40% of the main house floor plan. You are also required to offer a parking spot for tenants.
In Kelowna, you can only have one secondary suite and the home must have an "S" designation.
In Calgary, updated zoning legislation has now made it easier to add income suites.
Toronto has also proposed reforms that will make it easier to add suites.
In Montréal, anyone carrying out a project involving the addition of at least 1 dwelling and a residential area of more than 450 m² (equivalent to approximately 5 dwellings) must enter into an agreement with the City of Montréal in order to contribute to the supply of social, affordable and family housing. It can be a new building, an extension, or the conversion of a building.
Visit the official municipal websites or consult local building departments to obtain accurate and up-to-date information on the rules and requirements in your area BEFORE getting started.
Insurance & Legal Considerations: Before adding your secondary suite, ensure that you have proper insurance coverage or the ability to add additional coverage to protect both the primary residence and suite. In addition, you will want to consult a lawyer and draw up a tenant or rental agreement for any potential tenants. Ontario has a mandatory standard lease agreement that all landlords must use.
Unit Layout and Design: If the zoning and regulations in your area allow you to build an income suite, the next steps are to look at the suite layout and dimensions. Confirm any size restrictions or minimum ceiling height requirements as you are laying out the design for the unit.
The unit should have, at minimum the following:
Ensure that however your income suite is designed, you are hiring the appropriate building, plumbing, and electrical experts to ensure your suite is up to code and avoid any potential disasters.
Building & Trade Permits: Once you have confirmed that you are properly zoned and able to add an income suite and understand all the regulations for your area, you will want to draft your blueprints and submit a permit application, along with the fee, before you get started. For instance, in B.C. you are required to have a Building Permit for any suite to be considered legal.
IMPORTANT: Even if you are not required to have a building permit, it is important to get these permits for other aspects including insurance coverage should anything happen. Having a building permit will help protect your investment.
In addition to your building permits, you will need to get permits for any plumbing, electrical, and gas renovations prior to beginning your work.
Inspections & License: Once you have your permits and have begun construction, make sure you understand what inspections are required throughout the process and you schedule them accordingly with local authorities to ensure compliance with building codes, fire safety standards, and health regulations.
If the work meets all requirements, your suite will be approved. The last step is determining if you need a business license. This is not required if your family (parents, children, etc.) will be living in the suite. In Vancouver, for example, if you intend to rent out your suite long-term, you DO need a license. Be sure to check any rules on this in your area.
Incentives: Beyond the ability to earn extra income per month, there are a few additional government incentive programs when it comes to suites including:
While it is important to look online and do your research. Your best resource will be visiting local authorities at the “City of” to confirm that you completely understand the considerations before moving forward with implementing an income suite.
It’s the season of outdoor parties and a summer BBQ is the perfect way to enjoy time with friends and family! For some tips on how to make this year’s get-together your best one yet, check out my list below: