NEW GOVERNMENT FUNDING AVAILABLE!

If you are considering adding a small or tiny home as a secondary residential unit (an Accessory Dwelling Unit, ADU), there is funding available to help offset some of the costs!

The City of St. Catharines offers an incentive program, the Accessory Dwelling Unit Program, which is a grant program offering up to 70% of eligible project costs to a maximum of $80,000 for the construction of an exterior accessory dwelling unit(s).

The Federal government has added new refinancing specifically for homeowners looking to add a secondary suite (ADU) to their property. Announced on October 8th, 2024, this new refinancing product will allow for a homeowner to access up to 90% of the value of their property (which includes the value added by a secondary suite or ADU), with a maximum property value limit of $2 million, and a maximum amortization of 30 years. This refinancing program was launched January 15th, 2025.

If you are looking to build an ADU or tiny home on your property for a senior or family member with a disability, there is a tax credit available, the Multigenerational Home Renovation Tax Credit (MHRTC). This tax credit is for 15% of eligible expenses or up to $50,000 and would be claimed on line 45355 of your T1 income tax and benefit return for the renovation period for the tax year.

FREQUENTLY ASKED QUESTIONS

What is an ADU?

ADU stands for “Accessory Dwelling Unit”, and is the language often adopted by Planning departments to identify a residence in addition to the primary residence on a property. In a lot of Zoning bylaws, this may refer to an attached (an apartment) or detached (a small or tiny home) dwelling unit on the property. Some towns/cities may also use the language of a Secondary Residential Unit instead of ADU. When we refer to an ADU or Accessory Dwelling Unit, we are referring to detached ADUs.

Where can I build an ADU and what are the Zoning bylaws in my area?

The best place to start and verify what the zoning bylaws are for your property is to speak with your local Zoning and Planning Department. One important requirement is parking and access to the ADU or tiny home. However, here are some specifics with sections indicated for some of the local Townships. The information below is intended to help you get started with understanding what your local bylaws are, so be sure to read the full bylaws available from your local Zoning/Planning department and/or speak with someone at the department to verify all of the requirements:

Town of Lincoln: Section 3.34(a) of The Town of Lincoln Comprehensive Zoning Bylaw, July 2022:
- “A maximum of one secondary residential unit shall be permitted within a single detached dwelling, semi-detached dwelling, or townhouse dwelling. A secondary residential unit shall not be permitted in association with any other dwelling unit type.” [cont’d]
City of St. Catharines: Section 2.2.1 of the City of St. Catharines Zoning By-Law, up to and including Amendment No. 90, passed April 8, 2024:
- “A maximum of two accessory dwelling units are permitted with a detached dwelling unit, semi-detached dwelling unit, or townhouse dwelling unit and may be located within a principal dwelling unit (Interior Accessory Dwelling Unit) or within an Accessory Structure thereto (Detached Accessory Dwelling Unit), subject to [listed items 2.2.1.a-d].” [cont’d]
City of Welland: Section 5.2 of the New Comprehensive By-law, Amended by By-law 2024-99, October 1, 2024:
- (a)“Not more than two accessory dwelling units are permitted in association with a single-detached dwelling, semi-detached dwelling, two-unit dwelling and townhouse dwelling if no building or structure ancillary to the single detached dwelling, semi-detached dwelling, two-unit dwelling or townhouse dwelling contains a residential unit.”
- (b) “One accessory dwelling unit is permitted in a building accessory to a single-detached dwelling, semi-detached dwelling, two-unit dwelling or townhouse dwelling if the single-detached dwelling, semi-detached dwelling, two-unit dwelling or townhouse dwelling contains not more than one accessory dwelling unit.” [cont’d]
City of Niagara Falls: Zoning By-law No. 79-200:
- “A maximum of 2 ADUs can be located on a parcel of urban residential land which is within the Urban Area Boundary on which residential use is permitted and is served by municipal sewer and water services, subject to meeting all zoning regulations.
- A maximum of 1 ADU can be located on a parcel of rural land which is outside the Urban Area Boundary on which residential use is permitted and is served by private sewer and water services, subject to meeting all zoning regulations.” [cont’d]
Town of Grimsby: Section 4.19 of the Town of Grimsby Zoning By-Law, No.14-45:
- “A secondary suite shall be permitted within a single detached or semi-detached dwelling, in any zone where single detached and semi-detached dwellings are permitted provided that the other requirements of the applicable zone are adhered to and subject to the following:
  - (a) Only one secondary suite per dwelling unit is permitted;
  - (b) The secondary suite is clearly subordinate to the primary residential unit in the dwelling; [cont’d]

West Lincoln: Section 3.2.1 of the Township of West Lincoln Zoning By-law No. 2017-70:
- (b) A maximum of one (1) accessory dwelling unit is permitted on a lot, except where permitted otherwise by the applicable zone.
- (e) On a lot that is not serviced by municipal sewage services and /or municipal water services, an accessory dwelling unit shall not be permitted unless the lot has a minimum lot area of 0.4 hectare…
- (g) Where permitted in a Residential Zone, or as an accessory use to a dwelling that is permitted as a principal us in any other zone, an accessory dwelling unit shall be in accordance with the following additional regulations:
  - (i) An accessory dwelling unit shall be located within a single detached dwelling, semi-detached dwelling or an accessory building on the same lot as a single detached dwelling or semi-detached dwelling,
  - (ii) An accessory dwelling unit shall have a minimum floor area of 40 square metres and a maximum floor area of the lesser of 100 square metres or 40% of the floor of the main building… [cont’d]

Town of Pelham: Section 3.29 of the Town of Pelham Zoning By-law
- 29.1 Urban Area
  - (b) One Second Dwelling Unit is permitted in a detached accessory building that is accessory to a single detached dwelling unit, semi-detached dwelling unit or townhouse dwelling unit in the R1, R2, R3, RM1, RR, GF-R1, GF-R2, or GF-R3 Zone provided:
    - (i) A maximum of one detached second dwelling unit is permitted per lot;
    - (ii) The maximum floor area of the second dwelling unit is 75m²[read full by-law for all provisions]
  - 29.2 Agricultural and Rural Residential Zones
    - (a) Up to two Second Dwelling Units are permitted in a single detached dwelling unit in the RR or A Zones provided:
      - (i) The maximum floor area of the second dwelling unit is 93m²;
      - (ii) A maximum of one entrance is permitted along a front or corner side yard [read full by law for all provisions]
    - 29.3 Specialty Agricultural Zone
      - (b) One Second Dwelling Unit is permitted in an existing detached accessory building that is accessory to a single detached dwelling unit in the SA Zon provided:
        
        (i) The maximum floor area of the second dwelling unit is 93m²[read fully by-law for all provisions]
        
        [cont’d]

City of Thorold: Section 3.21 of the City of Thorold Zoning By-law No. 60-2019:
- “Where a second dwelling unit is permitted, the following regulations apply:
  - (a) A maximum of one (1) second dwelling unit is permitted on a lot;
  - (c) A second dwelling unit shall have a gross floor area of a maximum of 40% of the principal dwelling unit gross floor area;
  - (e) A second dwelling unit in an accessory building shall also be subject to Section 3.1…
  - (f) A second dwelling unit and a garden suite dwelling shall not be permitted on the same lot.
  - [cont’d]

City of Port Colborne: Section 2.9.1.2 of the City of Port Colborne Zoning By-law (By-law 6575-30-18)
- 9.1.2 Dwelling Unit, Detached Accessory
  - (a) Not withstanding any other provisions of the By-law, one detached accessory dwelling unit is permitted in any residential zone provided it complies with Section 2.9.1 (i) to (v) and shall not:
    - (i) Be located in a required front yard or corner side yard…
    - (iii) Exceed a building height of 6 metres…[cont’d]

Town of Fort Erie: Section 6.43 Bylaw 124-92:
- (b) Any lot in any “Residential 1 (R1) Zone” may have one second dwelling unit, subject to the following requirements:
  - (i) Only one second dwelling unit shall be permitted per lot. Second dwelling units are not to be permitted on a lot containing an accessory apartment.
  - (ii) The maximum floor area of the second dwelling unit shall not exceed 40% of the total floor area of the principal dwelling.
  - [cont’d]
Township of Wainfleet: Section 4.20 Secondary Suites of the Zoning By-law 034-2014:
- secondary suite shall be permitted within a single detached or semi-detached dwelling or within an accessory building on a lot containing a single detached or semi-detached dwelling in any zone where single detached and semi-detached dwellings are permitted provided that the other requirements of the applicable zone are adhered to and subject to the following:
  - (a) Only one secondary suite per single detached dwelling or semi-detached dwelling is permitted;
  - …
  - (d) The secondary suite shall have a maximum of 3 bedrooms;
  - (e) Where a secondary suite is within a single detached dwelling or semi-detached dwelling, the secondary suite shall not exceed 40% of the gross floor area of the primary residential unit in the dwelling;
  - …
  - (h) Access to the secondary suite shall be provided from the same driveway that provides access to the primary dwelling on the lot.

Why do people build ADUs on their property and how could it benefit me and my family?

Building a small home on your property as a secondary dwelling unit (ADU) is a great way to generate rental income, and for this reason alone, this movement is gaining popularity.
Building an ADU on your property is also an excellent solution for an aging parent who would like to downsize, but is finding the cost to do so too high. Or someone would like to be able to offer their parents independence with their own home, but the assurance of being nearby to help if needed.
ADUs are also a great way for parents to help their children with affordable housing as so many young adults are struggling to gain financial independence given the state of the current economy. Parents are looking for ways to help their children save by reducing their housing expenses by offering rent or purchase of an ADU on their property.
In general, taking advantage of the zoning by-laws and various government programs to alleviate costs offers a unique opportunity to property owners to participate in the need to build more houses, assist family and loved one, and generate income.

Do ADUs still need to comply with the Ontario Building Code?

Absolutely, 100%. An ADU is still subject to the permitting process, and must comply with the Ontario Building Code (OBC). Smart Home Designs Niagara aims to build housing that not only meets the OBC, but exceeds the code requirements.

How does adding an ADU impact my taxes?

Your taxes may be impacted by the addition of an ADU. Contact the Municipal Property Assessment Corporation (https://www.mpac.ca/) for more information on your property’s assessment.

Are there any financial subsidies or grants available?

There are various financial programs available to encourage property owners to add an ADU to their property to increase the housing supply in Ontario:

No Development Charges: Unlike with a primary residential building permit, ADUs are not subject to Development Charges. Development Charges were exempted this charge to ADUs under Bill 23.
New Mortgage Refinancing Program for Secondary Suites, in effect January 15, 2025:
- https://www.canada.ca/en/department-finance/news/2024/10/mortgage-insurance-rule-changes-to-enable-homeowners-to-add-secondary-suites.html
- https://storeys.com/feds-mortgage-refinancing-secondary-suites/
Accessory Dwelling Unit Program with the City of St. Catharines: https://www.stcatharines.ca/en/planning-and-development/planning-and-development-community-improvement-plan.aspx#Accessory-Dwelling-Unit-Program
Multigenerational Home Renovation Tax Credit (MHRTC): https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/new-tax-credit-help-offset-cost-adding-secondary-unit-family.html