Deputy Prime Minister Chrystia Freeland announced that starting January 15, 2025, Canadians will be able to access up to 90% of their home’s value through default-insured mortgage refinancing to build secondary suites.
This new program marks a revival of a similar initiative that was discontinued in 2016, when the federal government tightened mortgage insurance rules to cool the overheated housing market.
The reintroduction of this option is part of a broader effort to address the current housing shortage and affordability crisis by increasing the rental supply in high-demand areas while helping homeowners offset their rising mortgage costs.
“We must use every possible tool to build more homes and make housing affordable for every generation of Canadians,” Freeland said in a statement.
In its release, the government added that new rental suites would “provide more homes for Canadians and could provide an important source of income for seniors continuing to age at home.”
Key details of the refinancing program:
- Maximum loan-to-value (LTV): The LTV ratio can be up to 90% of the “as improved” property value, with the total property value capped at $2 million.
- Amortization period: The maximum amortization for this refinancing is 30 years, allowing borrowers to spread payments over a longer term.
- Number of units: Homeowners can add up to four units on their property, including the existing one.
- Self-contained units: Each secondary suite must be a fully self-contained unit, meaning it has separate living facilities, such as a private entrance, kitchen, and bathroom. This ensures compliance with municipal zoning requirements.
- No short-term rentals: The additional units must be long-term rentals and cannot be used for short-term rental purposes (e.g., Airbnb).
This latest announcement comes on the heels of other recent government moves, including mortgage rule changes that raised the cap on default insurance and reintroduced a 30-year amortization option for some borrowers.
Additionally, Canada’s banking regulator, OSFI, plans to remove the stress test requirement for uninsured mortgage switches, which had previously made it more difficult for homeowners to switch lenders. Read more about the government’s recent mortgage rules and OSFI’s stress test updates.
Unlocking vacant land
In addition to the support for secondary suites, the government is also taking steps to unlock vacant land for housing development.
As part of today’s announcement, Freeland also launched consultations on taxing vacant land, with the goal of encouraging landowners to develop unused lots. The government is seeking feedback from provinces, territories, and municipalities interested in creating their own vacant land taxes. The idea is to push landowners to make better use of their property, ideally leading to more homes being built.
Additionally, 14 more underused federal properties have been added to the Canada Public Land Bank, bringing the total to 70 sites now available for development. The goal is to turn these properties into new homes, contributing to the government’s plan to add more housing.
Feature image by Kevin Dietsch/Getty Images
Chrystia Freeland Department of Finance Editor's pick government of canada secondary suites
Last modified: October 9, 2024
The cost to build is too high for a property owner to come out ahead. We need ability to build tiny houses / container homes etc – structures that provide housing but don’t cost at least 250K to build.
http://www.steelcastles.com
We build prefab container homes and ship all over Canada, All our structures are built to code and comes turn key. Steel Castles have been providing backyard suites and primary homes for a number of years.
1. Make AND enforce absolute strict protection for small ownership landlords in Ontario from tenants who don’t pay rent
2. Cut NOT raise the capital gains taxes to give owners and builders an incentive to risk building
3. Cut taxes on rental income so small ownership landlords who sacrifice their life savings, blood, sweat and tears to build housing do more than just scrape by covering costs
Then MAYBE someone will take this seriously.
Oh yes, tiny homes. Shipping containers. That’s the future of home ownership Canadians want. I always thought growing up that one day I could own a shipping container. The Canadian dream, they said.
A lot of land is available in self serving rural areas. Land owners of large acreage not suitable for farming, with children & grandchildren would like to be able to sever parcels on privately maintained roads so that their families could stay in the area & ultimately build closer to their home. The gov’t is only looking out for city dwellers but rural is an important taxpaying section & are not asking for much….just the chance to build on their properties also! Field beds, wells, own maintained roads leading to a city road should be acceptable & no expense to the cities. Help us promote this also!
Nicole you are 100 percent right. They need to look into this. There are sooo many agricultural land on paper what is not suitable for it and close to cities and sitting empty .
What happens if your city zoning does not allow you to build secondary unit on your big backyard?
Tiny homes, no one wants a big expense, and I’m sure when someone buys a house, they really don’t want neighbors or any of the hassle that goes with it,,, long term only, well enough said,,
Secondary suite is a win-win for both owner and renter. With interest rates declining, with 30 yr amortization, income from a secondary suite could significantly reduce the mortgage burden. It could also help provide accomodation to a renter in a safe environment.
How about public transport so people could live outside the main city is still be able to go to work in the big cities
This is cool and all but my township won’t even allow me have more than one additional building ( 1 house and 1 outbuilding) on my 2 acre property! No matter what we try, we’re being stopped somewhere.
The number one thing she needs to do is get rid of the carbon tax in all it’s form and stages. And people will be able figure things out. We don’t need to carry that burden.
We are going through the same with township stopping us from building a small house for my son. 2 acres not good for anything else, no infrastructure needed. 2 and 3 million dollar homes going up around us
Not a chance I’d do that in ontario. You can’t get rid of a bad tenant in a timely manner. We already have a basement apartment that we keep empty. Why build something for tenants we don’t want? Everyone is getting out of the rental gig in ontario. Try as you might to screen for bad tenants, they look just like the good tenants on paper and in person.
Agree 100%. I also have an empty basement unit on my house that I won’t rent. Doug Ford keeps throwing money at the LTB in Ontario because he’s too cowardly to make the simple change back to no hearing for unpaid rent. I don’t get to live in my house if I don’t pay the mortgage, why should anyone get to live rent free?
I totally agree and tenants who do not pay there rent on time must be dealt with in a timely manner.
I believe that there can be many incentives in place but until the Government addresses the issues with the Landlord Tenant act., they will find most property owners unwilling to get into that situation
All these new mortgage changes will help but it does not address population density. Cities are already too crowded. Adding more suites and rental properties is a short sighted solution with negative long term implications. What we need is for government to creating policies that would encourage businesses to build and operate outside of the metropolitan areas so that people would have a choice where to work. I believe that a lot of people would move to a sub-metropolitan home if work was available there.
Absolutely
Agree
Traffic on the 400-series of highways and municipal roads around the GTA is already horrible, densification the number of people neighborhoods will make it worse. Cost-of-living for the lifestyle in the GTA is retarded. There’s way better places to make & spend money.
The cities infrastructure is already overburdened. Does anybody ever think how schools, hospitals and roads are going to accommodate more people. They should develop more cities with jobs to accommodate growing population. There should be a limit on the density. Don’t make Canadian cities like third world countries. We have enough land to develop.
Your are right. We need visionary politicians who are able to think about all of the problems we encounter and envision the solutions down the road in long terms.
What is vacant land? I walked passed a land labeled as vacant; however there are five mature trees there. We need green spaces. The trees already occupied the vacant land.
As a homeowner, keeping the bsmt 2 BR unit empty because, all the laws favour the tenant. If you get a bad tenant you are on your own. Police & city won’t do anything.
Not with the $$$, peace of mind is more important.
We have to find a way to let people buy not rent , or condo. I can’t retire because I have a small mortgage, I would be in trouble if I had to pay rent , it would be double my mortgage
Do I have to pay interest rates for the payments
Many interesting comments and perspectives. It got Myriam thinking about how complicated it is but how simple some of the solutions are.
I know that Caledon had a minimum build of 2000sq’ at one time. Hence why mega homes are the norm and a shared living designed community was forced to build a giant home to accommodate it’s residents. Where as in Upstate New York the same amount of space was used to build and accommodate far more unrelated people living in separate units.
1) I encourage everyone whose municipality is blocking ADU’s (Accessory Dwelling Units) on a 2 acre property to research the models other cities are using to put ADUs in. Then call your local journalist to write about it; next start a petition; 3rd delegate and educate your city leadership on how they can ease some of the housing burden.
2) Maybe some don’t want to see an ADU in the yard next to them. ADU’s are nicer than rotting garden sheds or tents to look at.
3) as for gridlock – our population density is not causing that. Most countries in the world and have higher densities but they also have better planning and public transportation and active transportation infrastructure. It’s the norm that their populations prefer to use public transit, rather than drive everywhere.
If our leadership stopped widening roads; subsidizing the auto industry (especially electric cars) and instead subsidized effective and efficient public transit (why is it cheaper to drive than use Via Rail- why is GO only catering to the commuter outside the GTA? Shouldn’t I be able to go to & return from another city in one evening For entertainment, like dinner and a show, by public transit?) – I for one would love to get out my car and enjoy the go or via or long distance buses. More time to relax; read etc. No extra expenses and hassles of parking etc.
4) I am sorry to hear how many of you have had bad tenants. Or have you? Are you keeping your accessory apartment empty from fear of a bad tenant and being caught in a broken system? One bad story from a friend; about someone else and the media hasn’t helped that fear subside has it? I encourage you to start hearing of how many amazing tenants are out there – let me tell there are lots!! Were we not all of us one of those good renters at some point?
5) AirBnB: That’s always an interesting debate. The Airbnb owner wants the highest rate of return on their unit = taking one more home out of the offerings.
Or the person with the mortgages paid off but keep their rent at market rent.
Market rent is set by the majority of property owners “Reits” which I will talk about later.
Yet these vacant unit, Airbnb and mortgage paid off landlords are often the same people complaining that their child can’t find an affordable place to
live or that there are too many homeless people in their city.
6) The farmland aspect is a slippery slope. Look at Woolwich Township’s challenge right now! We need prime agricultural land for good food. You can enjoy lab meet or highly fertilized vertical farming food if you wish. You think children have neurodiversity now…
We also need the wetlands on farms for storm water management; healthy eco systems that support us; and healthy soil. However, I agree that there is fallow land that could allow inter generational growth on many farms. Again delegate to your leadership.
7) Agreed that there has to be a balance between green space and infill development. That is why cities have to prioritize using The Parkland Dedication by-laws, along with best practices infill design to meet that balance. Municipalities must negotiate the maximum land or monies allowed. If the latter, then municipal leadership must do as their predecessors did and by and dedicate land as parkland or preserved heritage, ecological or cultural lands for future generations. Thing of your favourite green, cultural or heritage spaces at home; around Canada and the world. They are also huge tourism attractions along with sanctuaries for health; education hubs etc. Did you know that the park that is the peninsula of Sydney Harbour was slated for development? Luckily, the three levels of government were aligned in the vision to protect it. However, it was the home builders associations that were the biggest supporters by refusing to build!! Image long term vision over greed!
5) Wouldn’t you rather see ADU’s in the backyard next door than tents? Aren’t you hoping your elders can age in dignity or your kids or the ones that growing up next door can? Canadians are spoiled with space and the settlers mindset.
Colonizers were given “Crown Land” for free. Some were smart and took natural areas in the Muskokas, BC etc and became loggers; trappers; tourist destinations etc ; others took raparian areas along waterways and established shipping ports; fishing industries etc. You get the picture. Later after the war; many returning veterans were given the choice of free education or a free small war time home (many selling for $1M today) . In the 70’s and 80’s there was a lot of grants and developers willing to build affordable housing (truly affordable – mixed rent gear to income, market rent and subsidized) and those developers and builders made a good wage – not a greedy haul on the backs of those going to live in these homes.
Today the definition of affordable housing is something like 70% of market rent – which we know is inflated by corporate restate holders. That’s crazy to say 70% of a $800,000 home is affordable. That definition has to change and only good leadership can do that!
There is one person in my city that holds over 30 houses under his corporate numbered company. All are rented by the room; not the house = 38 potential long term homes in your mind but, also great starting points for people just moving out of their parents house; starting up in a new city for school or a job. He is making so much profit that he is able to build an ADU in the back yard of each . Cost per ADU = $188,000. Now that property is unaffordable for a first time home buyer or someone downsizing but, it is providing more dignified homes for many people.
It’s a vicious circle – depending upon your perspective.
A friend of mine bought a beautiful double lot with the intention of gutting and renovating the stone cottage that is in rough shape and building a new build that will compliment the neighbourhood. Yes, the double lot is occupied with some beautiful trees. So the NIMBists are fighting the infill. At the same time the city is asking vacant land owners to offer land for a tiny home pilot..,,,,,,, which you rather a well thought out and build home with as many of the large trees protected or many tiny homes on that lot?
8) what happened to all that free and accessible houses from days gone past? Well, you might have inherited one of those properties in the Muskokas, on Vancouver island; along the St. Lawrence, or war time homes and now call it home, the cottage or your business.
Much of the affordable housing stock was passed onto private management and it is crumbling – disrespecting it’s tenants; heritage and purpose for being built on our tax dollars. Owners waiting to have it condemned for demolition and ……
Others are being renovated and using Reno-evictions to displace the folks that it was intentionally built for = housing security for the lesser advantaged. In California some of those who have been entrusted with housing vulnerable tenants in affordable housing have abused it . They have been caught and charged with renting vacant units on Airbnb to tourists.
9) That brings me to the Landord Tenant Act: it is a complicated; and housed in an understaffed and underfunded department. It has deep rooted failures that hurt tenants; landlords and tax payers. Yes, you and me. Imagine being the tenant who is living in a unit with a landlord who is only collecting rent but not maintains the unit or, who has been Reno or relative evicted ? In the first case the Reno is insignificant or take 8month instead of the month it should – but the landlord does not fulfill their legal obligation to offer the u it back to you after the renovations. Or you know a family member has not moved in and you see your unit up for rent again at a significantly higher rent.
Or you are the landlord who is just trying to offset their high mortgage costs but the tenant is not paying or has caused property damage?
Did you know that many landlords are also falsely claiming and being supported in their claim of rent in arrears at the tribunal (hundreds of thousands of dollars!)
I can go on but those negligent and selfish acts/situations from both renters and landlords are clogging up the LTTribunal for the real cases, spending unnecessary tax payer dollars.
10) Let’s talk about the greed and those using it to exploit a system to capaitalize their personal profits eliminating the notion of home into a money making box.
First let’s dissolve REIT’s like Blackstone; Skyline and all the similar rel estate investment companies. Why?
a) when the majority of the housing stock is in the hands of a few corporations (think also of the person with over 30 houses in one mid sized city) then they regulate the market. Like the Grand Lord on the hill and his tenant farm workers. And they are in the business to Make money.
Unlike the single person land holder, REITS not only ace to make a salary for the original owners but, for all their share holders as well.
Guess what any of you holding shares in a REIT and bragging about your 14% interest in a 1% BoC rate time are part of the problem. How do you or your children expect to be able to compete with those corporations to get into the housing market or find reasonable rent.
They make their profits on the backs of current renters and hopeful home owners.
Now for the notion of foreign ownership. We are no longer a nation of colonizers so we shouldn’t be allowing foreign ownership. I have have lived in several countries and they allowed 99 year leases or mandated a national on title in foreign “ownership” situations. Some foreign ownership leads to vacant units due money laundering and investment properties.
Let’s talk investment properties. I read of a unit in Toronto that flipped 24 times before it hit the
open market. How does the average person compete with that deliberate rouse to increase the price of housing?
Or this comfortable set up:
There is a realtor in my Ontario city who has several investors waiting with money in hand. The Relator gets a good listing, closes the sale (with may be one open house); gets two commissions. Then gets paid as their mortgage broker; their designer and contractor. The Relator now re-lists the house and collects another commission. Again, how does the average person compete with that set up? It removed yet one more starter/fixer up home from the market.
Note : BC no longer allows a Relator to represent both the vendor and buyer).
Don’t forget how helicopter parenting; king bed ensuite bathroom children has created a few tenants who don’t even know how to clean let alone; pay a bill. They are refusing to settle for an average unit or shared housing accommodation situation. These prospective tenants are driving a demand for more luxury units and are not willing to share with someone else or go to the laundry mat. They are often hard tenants for the average homeowner to have because of their lack of domestic skills (cleaning; sorting garbage; shovelling snow) and their demand for parking spaces. Yet, these prospective tenants are the first to complain about the cost of rent while drinking bottled water (in a country with potable water); after having just purchased the latest $1200 phone or spent the day at the spa; which they drive to in their new car.
When he say my friend’s beautiful stone cottage in a small town, a friend son said to my friend – “I didn’t know you were one of the rich guys. “ It took everything fir my friend not to respond aggressively. There is a generation who is challenged in even being able to buy a fixer upper let alone know how or be willing to put in the work renovate it. My friend got where he is because he and his wife shovelled human feces and scrubbed nicotine and urine from a home; and then spend years gutting; living in a construction zone and restoring their home.
I was looking at a 49yr old home with a friend who must have watched too any HGTV shows. Everything in this home was dated but immaculately maintained clean and completely functional. Had my friend been able to outbid the investors who got the house- my friend would have wanted tear out the perfectly good older kitchen and bath and then complained about the cost of housing?!
My conclusion: WE ARE LIVING IN A TIME OF GREED AND TOO MUCH IN THE MOMENT OF WHAT’S IN IT FOR ME AT ALL LEVELS. When we we think about how our individual decisions affect ourselves and future generations?
As I said, it is a vicious circle. It’s a complicated issue that is happening all over the world.
However, as a new country with a tiny population on a huge land mass I believe we have become spoiled by the idea of single family homeownership . In England. If you are lucky, you inherit the 100year mortgage; my professional friends in Switzerland never expect to own a home and friends in Germany have converted the home of deceased Grandmother into a triplex with a unit for each Grandchild. Friends in Manhattan love their rentals and friends from France and Amsterdam say their whole unit fits in our average sunporch.
All I ask is that you don’t take any of these loop hole practices and do them yourselves! Please put your greed aside; think about leaving a positive impact!