BREAKING: BoC Holds Interest Rate For Second Time In A Row

Rental Suite

Learn what a rental suite is in Canadian housing — how it's defined, what makes it legal, and how it supports affordability and homeowner income.

Rental Suite

June 23, 2025


What is a Rental Suite?

A rental suite is a self-contained living unit within a home or property that is rented out to a tenant, commonly located in a basement or accessory building.

Why Rental Suites Matter in Real Estate

In Canadian real estate, rental suites offer homeowners a source of income and contribute to affordable housing, but must comply with zoning, safety, and permit regulations.



A legal rental suite typically includes:
  • Private entrance
  • Kitchen and bathroom
  • Heating and ventilation
  • Proper egress and ceiling height



Municipalities often distinguish between legal and illegal suites. Legal suites may affect mortgage qualification and insurance policies.



Understanding rental suites is important for investors, homeowners, and tenants evaluating income potential and legal compliance.

Example of a Rental Suite in Action

The homeowner installs a code-compliant rental suite in the basement, including a separate entrance, kitchen, and egress window for safety.

Key Takeaways

  • Generates rental income
  • Must meet safety and zoning rules
  • Often located in a finished basement
  • Legal status impacts financing and resale
  • Requires proper egress and ventilation

Related Terms

  • Finished Basement
  • Egress Window
  • Zoning
  • Rental Income
  • Secondary Suite

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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