July 4, 2025 | Real Estate Tips

Building an Accessory Dwelling Unit in Ontario: What to Know

Share This Post:

Share on Facebook Share on Twitter Share on LinkedIn Share via email

Meet Emily, a first-time home buyer who is excited to jump into the spring/summer market. She purchased a phenomenal 2-story home in Guelph and converted the basement into a cozy accessory dwelling unit (ADU) and now hosts her Grandmother, saving her family from the costs of semi-assisted living and creating a comfortable lifestyle for them both – this could be you. 

Better yet, it could be you creating an income-generating suite to help offset the cost of your mortgage. 

But the better question is, why now? Everyone understands the uncertainty of the economic situation in Canada; however, this is actually a fantastic opportunity for you as a buyer. 

Toronto alone has 75,000 secondary dwelling suites, and right here in Guelph, 9% of detached residential homes have a built-in or separate ADU. It’s like having multiple houses on one property.

Thinking about building a tiny home in Ontario? Click here to read our tiny home guide.

What is an ADU? 

An ADU is a secondary suite, in-law flat or laneway home that is semi-detached or entirely detached from the primary unit on the property, sometimes referred to as an accessory dwelling unit or additional dwelling unit. Even converting a garage into a living space counts as an ADU.

There are various types of ADUs. For example:

• Internal access ADU (basement or attic suite)
• Attached ADU (garage or addition)
• Detached ADU (coach house, tiny home or laneway suite is an ADU house)

Understanding The Legislative Realm

A common question we hear is: Can you build a second house on your property in Ontario? In Ontario, Regulation 462/24 allows for up to three units per lot, depending on the size and nature of the land, the setbacks, and the coverage rules. Bill 23 was passed in 2022, which amended Ontario’s Planning Act, replacing it and requiring all municipalities to allow for at least three units per lot (primary unit + 2 ADUs)

Guelph’s council updated the official Planning and Zoning By-Law to allow for up to four units per property, allowing for more diverse housing options such as fourplexes and low-rise neighbourhoods. This is eligible in all R series Zones, including attached and detached accessory basement units. 

Searching for the perfect home? You may find helpful insights in these related blog posts!

• Best Small Towns in Ontario For Families
• How to Buy a Rural House in Ontario
• The Do’s & Don’ts of House Hunting

Building a Secondary Suite in Guelph: Key Requirements

Your first step is always going to be to check the zoning and bylaw requirements for ADUs in your area. This will include information on parking, height requirements, setbacks and the necessary unit size. 

Zoning Requirements and Limits in Guelph Include: 

• Attached ADUs (main building): must be less than 45% of the main dwelling’s gross floor area and have internal access 
• Detached ADUs: Less than 861ft or 30% of the yard, and have a height of 5m or 6.1m if over a garage 
• Parking: Must have at least 1 separate PRIVATE off-street parking per ADU, plus one for the main unit with a minimum measurement of 3 x 6 m each parking space. 
• Where Are They Permitted: R.1, R.2 and R.3B zones, but not allowed in R.3A [cluster townhome] or lots with more than two principal homes. 

Permit and Registration Fees

In Guelph, there is a one time fee which applies to the registrant of the ADU and is payable via the Guelph Permit System 

• $160.00 to a New and Owner Occupied Suite
• $320.00 to a New and Non-Owner Occupied Suite
• $320.00 to an Existing and Owner Occupied Suite 
• $640.00 to an Existing and Non-Owner Occupied Suite 

Codes and Compliance

There are existing compliance and regulatory measures in place to ensure the safety of ADUs as secondary dwellings. 

First, they must meet the Ontario Building Code and Fire Code Standards. Second, like all buildings, they have to undergo Municipal Inspections to ensure that they are up to code. Finally, they have to comply with Electrical requirements and complete the necessary electrical checks. 

Hoping to increase your home’s property value? Check out these related blogs next!

• Acreage Landscaping Ideas to Increase Property Value
• Boost Your Home’s Value with These Renovation Tips
• What’s My House Worth?

Submitting Legal Documents

Now it is time to apply for a permit, and to do so, you will need to gather up all of the needed documentation. Here is a list of all the forms you will need to submit:

• Complete the Permit Application Form with the City of Guelph
• Submit a Copy of the Site Plan
• Include a Copy of the Construction Drawings Provided by the General Contractor/Builder of your ADU
• Send off any Architectural or Engineering Renders
• Include any Energy Efficiency Reports 
• Send Your Proof of Insurance 
• Include any Permit Fees 

How Long Will Approval Take?

Approvals in Guelph tend to take anywhere from 4-12 weeks, and construction can take as little as three months but as much as 12 months from start to finish. It all depends on the size, scope and terms of your project. 

Common Challenges and Issues

There may be zoning surprises in the process of building your ADU, such as local amendments that impose particular setbacks on the land you intend to build on. ALWAYS make sure you verify the zoning requirements with your local municipality before you start your project. 

Parking logistics is another common setback since the City of Guelph requires an additional parking spot for your ADU. Even if you intend on using your ADU as an Airbnb or in-law suite, in order to get the permits to build it, you have to ensure it meets the requirements for private, separate parking from the primary suite. 

Underestimating initial costs is another common flaw in the building process. Make sure you have additional room in your budget for the permit fees in Guelph, as well as contingency for the design process, inspection costs and some wiggle room for design elements in case changes or mistakes happen during the design process. 

Building An ADU: General Advice

ADUs are a great option for multi-generational living, income suite potential, a first-time home buyer looking to help offset their mortgage or a recent divorcee with extra living space in their existing home. With easements on the old regulation dating back to 2022, the number of ADUs continues to rise as a mode of affordable living. 

And ADUs don’t just have to be a home, they also make great spaces for additional storage, a home office, a yoga studio, an art studio/gallery space, a movie spot or a separate unit for a teenager/young adult still living at home. They allow you the freedom to design your own space and choose its use! 

Whether it is passive income you are looking for or just the introduction of more living space, building an ADU as a secondary dwelling in Guelph and across Ontario is becoming even more accessible! 

Buying or selling in Guelph? We can help! Reach us by email at info@capstonereps.com or call 519.824.9050.