Feds making it easier for Canadians to add rentable secondary suites to their homes

Canadians looking to make extra income through their homes might finally have a chance.

On Wednesday, Deputy Prime Minister and Finance Minister Chrystia Freeland announced new actions that’ll help homeowners in Canada build secondary suites.

“We must use every possible tool to build more homes and make housing affordable for every generation of Canadians,” she said.

“Today, we are taking bold action to deliver on key parts of that plan, which will build new homes by making it easier to add a secondary suite to your existing home.”

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Freeland revealed technical guidance for lenders and insurers to offer mortgage refinancing for homeowners looking to add secondary suites to their homes starting January 15, 2025.

These mortgage insurance reforms are in addition to the coming Canada Secondary Suite Loan Program, which will enable homeowners to access up to $40,000 in low-interest loans to add rental units to their homes.

Ottawa says that both of these measures will make it easier for Canadians to convert an unused basement into a rental apartment or a garage into a laneway home to increase density in communities.

“Secondary suites can help homeowners pay their mortgage with a new rental apartment and bring families closer together,” reads a news release.

“For example, a retired couple may wish to downsize into a new laneway home or in-law suite, so their children could raise their young family in the property’s existing home.”

All in all, these measures will do the following:

• Allow refinancing of insured mortgages for secondary suites to let homeowners access the equity in their homes to finance the construction of secondary suites. Borrowers will be able to access financing of up to 90% of the home value, including the value added by the secondary suite(s), and amortize the refinanced mortgage over a period of up to 30 years.
• Increase the mortgage insurance home price limit to $2 million for those refinancing to build a secondary suite to ensure homeowners can access this refinancing in all housing markets across the country.

In addition, Freeland also launched consultations on the taxation of vacant land.

The federal government is asking for feedback from provinces, territories, and municipalities interested in implementing their own vacant land taxes.

“By taxing vacant lands, landowners would be incentivized to maximize the full potential of their land—building homes,” reads a news release.

Lastly, Minister of Public Services and Procurement Jean-Yves Duclos announced that an additional 14 underused federal properties have been identified as suitable for building new homes.

We’ve added another 14 properties to the Canada Public Land Bank to build more homes on federal lands.

We are working with all levels of government, Indigenous partners and housing providers to build strong communities and affordable homes for Canadians. pic.twitter.com/z4S8CVqCnr

— Jean-Yves Duclos (@jyduclos) October 8, 2024

They will be added to the Canada Public Land Bank, which means, as of today, 70 federal properties have been unlocked and are available to homebuilders.

The government says this is part of its work—as Canada’s largest landowner—to turn unused and underused federal properties into 250,000 new homes.