If you’re a homeowner in Toronto or the GTA thinking about a garden suite, laneway suite, or legal secondary unit, the first question is almost always the same. “How do we make the numbers work?” So if you’re building an ADU in Toronto, here’s how to stack incentives, rebates, and low-cost financing.

At Laneway Home Builders, we design and build laneway and garden suites for investors, aging in place, retirement planning, and multi-generational living — and we’re constantly tracking the incentives and financing tools that can reduce upfront costs and improve ROI.

Here’s what’s real, what’s worth your time, and how to stack the best options.

1) The most overlooked “grant” is actually a refundable tax credit (up to $7,500 back).
If your goal is multigenerational living — moving a parent (65+) in, or creating a self-contained suite for an adult family member eligible for the Disability Tax Credit — the federal government offers the Multigenerational Home Renovation Tax Credit (MHRTC). It’s a refundable credit worth 15% of eligible costs up to $50,000, for a maximum of $7,500 back. You claim it on your personal tax return (T1, line 45355) and keep your receipts.
Learn more here: CRA MHRTC.

2) Mortgage refinancing for secondary suites got a major upgrade (up to 90% LTV).
For many families, the fastest path to funding an ADU is refinancing — and the rules changed to make it easier specifically for creating legal secondary units. A federal backgrounder confirms that insured refinancing can go up to 90% loan-to-value, with up to 30-year amortization, provided the “as improved” value is under $2 million, the new unit is self-contained, and it’s not used for short-term rentals. Importantly, the property can have up to four dwelling units total, including what already exists.
Start with these references: Finance Canada – mortgage insurance changes and CMHC Refinance.

3) The $80,000 “Secondary Suite Loan” has been announced — but treat it as a moving target until intake is crystal clear.
You’ve probably heard about a federal loan described as up to $80,000, 2% interest, 15-year term, intended to launch in early 2025. That announcement is real.
Read the official release here: Finance Canada – Secondary Suite Loan Program announcement.
Our advice: plan your project so you’re ready to move when program administration is clear (permits, drawings, scope, budget), but don’t base your whole feasibility on a loan process you can’t yet verify end-to-end on Canada.ca.

4) Don’t ignore GST/HST rebates — just be careful with the fine print.
Depending on whether your suite is owner-built, substantially renovated, or intended as a long-term rental, you may qualify for a GST/HST New Housing Rebate or a New Residential Rental Property Rebate. These are real CRA programs, but the amount depends heavily on the exact scenario and value thresholds.
Start here: CRA RC4028 – GST/HST New Housing Rebate and the filing info: RC4028 page.

5) Development charges: Ontario has exemptions, and Toronto has a specific deferral program.
At the provincial level, Ontario’s Development Charges Act includes exemptions for creating additional units in existing houses, and in some cases for a unit in an ancillary structure — which can be relevant for garden/laneway suite projects depending on your lot’s current unit count.
Toronto homeowners should also look at the City’s Laneway and Garden Suite Development Charges Deferral Program, designed to encourage these projects.
City program here: Toronto DC Deferral Program.

One last “incentive” that saves real money: free pre-approved plans.
Toronto now offers pre-approved garden and laneway suite plans intended to reduce design time/cost and streamline permits. Even if you don’t build the plan exactly as-is, it’s a smart reference point and can shorten the path to a permit-ready submission.
See the library here: Pre-Approved Garden and Laneway Suite Plans.

If you’re considering an ADU in Toronto or the surrounding GTA, our recommendation is simple: don’t chase every program — stack the ones that fit your situation (multi-generational tax credit + refinancing strategy + DC relief + rebate eligibility), and build a budget that works even if one incentive changes.

If you’re thinking about adding a Garden or Laneway Suite to your property and want to know if your property qualifies, order your no-obligation Feasibility Report by clicking here or call us at 647-948-5690