# Basement Apartments Now Legal Across Ontario?



## iherald (Apr 18, 2009)

I know originally a lot of cities and towns would not allow basement apartments. I thought I heard on the radio that Mississauga had just changed their policies based upon new province wide legislation that allowed basement apartments that was coming into effect. Was I asleep when I heard that? I tried to find it online and can't find anything.


----------



## Jungle (Feb 17, 2010)

Get ready for 10 cars on the driveway and street.


----------



## Zeeshan Hamid (Feb 28, 2012)

Though basement apartments aren't legal in some municipalities, that never stopped people from renting them out anyway. It's better to allow them so you can focus on making sure 1) they meet the code [it's pretty strict] and 2) make sure that owners pay the multi-unit property tax rather than the lower single family property tax. AFAIK, Brampton didn't allow basement apartments. Ya right, there are probably thousands of (illegal) basement apartments in Brampton.


----------



## Berubeland (Sep 6, 2009)

http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=2440

You are not asleep  It was signed into law in January, but the cities have not yet figured out what to do. 

For a while there I was thinking that the cities were monitoring the mls as new owners buying these duplexes for income were being closed down. I also had the thought that real estate agents who spend a sizable portion of their time telling us all about how professional they are might spend a little more time informing their clients about the legal pitfalls of renting out basement apartments.


----------



## Homerhomer (Oct 18, 2010)

Jungle said:


> Get ready for 10 cars on the driveway and street.


Having it legalized will have no effect on it at all, everyone who wanted to rent out the basement would have done so already, and the once who didn't won't do it anyway.

It's a private driveway, poeple should be able to park as many cars on it as they want.


----------



## Homerhomer (Oct 18, 2010)

Zeeshan Hamid said:


> make sure that owners pay the multi-unit property tax rather than the lower single family property tax..


Absolutely, it's crucial that our politicians have more of our money to waste ;-)


----------



## iherald (Apr 18, 2009)

Zeeshan Hamid said:


> make sure that owners pay the multi-unit property tax rather than the lower single family property tax. n.


What's interesting is that I live in a legal duplex, and it's semi-detached. The house that's attached to me is not a duplex, and was our property assessments showed that his was valued at $40,000 more than mine. So he paid more taxes than I did. I'm not sure how or why they determine whether a duplex is worth more or less, but I thought it was interesting.


----------



## Zeeshan Hamid (Feb 28, 2012)

Homerhomer said:


> Absolutely, it's crucial that our politicians have more of our money to waste ;-)


Tax rates for duplexes are typically higher than tax rates for tax rates for single family dwellings because obviously, multiple units create more demand for municipal services. Without it people renting out basements would be getting a subsidy (especially compared to people legally purchasing apartments and townhomes to rent them out since they pay property taxes from their rental income). 

Zeeshan


----------



## Berubeland (Sep 6, 2009)

Renting out a basement apartment is hardly a great income producing business when you consider how much your utilities go up (around $150 for me) the initial investment, the quality of tenant and the taxes you would pay on the income. Add property taxes to that and you'll be really cooking with fire.


----------



## Homerhomer (Oct 18, 2010)

Berubeland said:


> Renting out a basement apartment is hardly a great income producing business when you consider how much your utilities go up (around $150 for me) the initial investment, the quality of tenant and the taxes you would pay on the income. Add property taxes to that and you'll be really cooking with fire.


Agree, it would result in even less poeple renting out the basements simply because it wouldn't be worth it anymore, and the others would be forced to pass on the additional expense to the tenants (if bylaws permit). Bottom line the rents would go up due to less inventory and higher costs, and since basements are often rented by poeple with low incomes it would really be playing with fire.


----------



## Four Pillars (Apr 5, 2009)

Berubeland said:


> and you'll be really cooking with fire.


Isn't that a good thing? ;P


----------



## Zeeshan Hamid (Feb 28, 2012)

Berubeland said:


> Renting out a basement apartment is hardly a great income producing business when you consider how much your utilities go up (around $150 for me) the initial investment, the quality of tenant and the taxes you would pay on the income. Add property taxes to that and you'll be really cooking with fire.


That's not the point. I actually dont agree with the property tax system (it's a highly regressive tax), but the way it's set up residential units pay property taxes. Basement apartments need to pay their share as well, just like everyone else. They receive municipal water, drive on municipal roads, use libraries, transits, schools etc. Why shouldnt they pay like everyone else?

Either way, if you're renting your basement out and not paying multiunit taxes then you're evading taxes and committing a crime. If enough people in a municipality do it then law abiding citizens end up paying more property tax than they need to.


----------



## Sherlock (Apr 18, 2010)

I'm gonna go out on a limb here and guess that the vast majority of people who have basement suites in the GTA do not declare the rental income on their taxes and have no intention of doing so in the future.


----------



## Berubeland (Sep 6, 2009)

The reason why basement suite owners should not have their property taxes increase is because it is their house and they have to sacrifice part of it. They are already paying for their square footage use of it, the services and so on. 

Income taxes sure pay more. But like I say it's not a very profitable thing.


----------



## Homerhomer (Oct 18, 2010)

Sherlock said:


> I'm gonna go out on a limb here and guess that the vast majority of people who have basement suites in the GTA do not declare the rental income on their taxes and have no intention of doing so in the future.


Don't think so, pretty much everyone declares it becase the tenants put it on their personal tax returns to get the credits. There may not be a profit on it but that's a different story.


----------

