‍Canada Secondary Suite Loan Program

Low-interest loan up to $80,000 to help finance a new secondary unit (15-year term at ~2% interest). Launched in 2025 as a federal program to encourage basement apartments and laneway suites.

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Multigenerational Home Renovation Tax Credit

A one-time tax credit up to $7,500 for constructing a secondary suite to house a senior parent or adult with disabilities (multigenerational living).

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Canada Greener Homes Grant

‍Grants up to $5,000 for energy-efficient upgrades (insulation, windows, heat pumps, solar, etc.) which can be applied to your ADU project. (Stacking this grant can reduce your costs if your secondary unit is built to high efficiency standards.)
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GST/HST New Housing Rebate

‍Rebate of the federal GST/HST on a newly built or substantially renovated home, including major additions like a laneway suite. This can return thousands of dollars after your project, depending on construction costs.

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Toronto Laneway & Garden Suite DC Deferral

‍No development charges upfront on new ADUs. The city defers development charges for 20 years or until the property is severed, meaning most laneway and garden suites pay $0 in municipal development fees. (You must agree not to sever/sell the unit separately within that period.‍

Home Equity Line of Credit (HELOC)‍

A flexible, revolving credit line backed by your home equity (up to ~65% of your property’s value). Pros: Borrow as needed in stages and pay interest-only on the amount used, great for a project with unpredictable costs. Cons: Variable interest rates; requires at least 20% existing equity and good credit

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Construction Loan (Progress-Draw Mortgage)‍

A short-term loan that releases funds in stages as your ADU is built. Often interest-only during construction, then converts to a standard mortgage once the unit is complete. Pros: Covers large construction costs with lender oversight (they pay contractors as milestones are met). Cons: Requires detailed plans, lender approvals, and usually a building permit before first draw.
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Cash-Out Mortgage Refinance‍

Refinance your current mortgage to withdraw equity (up to 80% of your home’s appraised value). This gives you a lump sum at regular mortgage interest rates to fund the ADU. Pros: Typically lower interest than HELOCs or personal loans. Cons: Resets your mortgage term and could incur penalties if done mid-term; you’ll start a larger mortgage balance going forward.
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Unsecured Renovation Loan

A personal loan or line of credit not tied to your home. Pros: Faster approval (based on income and credit) and no risk to your property. Cons: Smaller borrowing limits and higher interest rates than secured home loans, so these are best for modest renovation budgets.

HELOC vs. Refinance

‍If you have significant equity and a low-rate first mortgage, adding a HELOC lets you access funds as needed without disturbing your original loan. In contrast, a cash-out refinance can unlock up to 80% of your home’s value at a low fixed rate – ideal if you need a large lump sum and don’t mind restarting your mortgage.

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Government Loans & Grants

Forgivable secondary suite loans (e.g. Ontario Renovates) offer up to $50k essentially as free funding if you rent your unit affordably, while the new Canada Secondary Suite Loan provides a $80k boost at just ~2% interest – far cheaper than private financing These programs significantly cut down the cost of adding an ADU.

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Traditional Home Equity Options

‍Utilizing your home’s equity is the most common route. A Home Equity Loan gives you a lump sum upfront (with a second mortgage payment) – good for fixed-budget projects – whereas a HELOC is perfect for flexibility, letting you draw money in phases and pay interest only on what you use.

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Construction Financing

‍For major builds like standalone laneway houses, a construction loan or builder’s mortgage finances the project in stages. You get peace of mind that funds are available for each phase, though the bank will require plans, permits, and inspections before releasing money. This structured approach ensures you can cover contractor payments at every step.

What zoning and permit rules do I need to clear before any financing kicks in?

Toronto requires a full Building Permit and compliance with the Laneway & Garden Suite By-law (setbacks, height, laneway width). Start by pulling your lot map and speaking to a designer—most lenders and grant programs won’t release funds until permits are issued. Our step-by-step Process Map walks you through Design, zoning review, and permit fees.

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Are there any tools or how-to guides I can use to plan my ADU project?‍

Absolutely. Head to our Resource Directory → Tools & How-To Guides section. You’ll find:

• Interactive budget and ROI calculators
• An interactive Proforma  tool that helps developers and homeowners estimate the financial feasibility of their ADU or multiplex project
• Real-life Journeys and stories from across the country.

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Will adding a laneway suite or basement apartment increase my property taxes?

Probably yes. Adding an ADU increases your property’s assessed value, which in turn will likely raise your property taxes to some degree. The exact increase depends on the added value of the new unit. However, the rental income or added utility from the suite often outweighs the bump in taxes for most homeowners. It’s wise to budget for a higher assessment after your ADU is completed.

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