Three Legal Units on One Lot in Ontario: The Bill 23 Additional Dwelling Unit Rules

Adding a rental unit on your own lot used to mean a long zoning by-law amendment process. Bill 23 simplifies it dramatically: most residential lots can build up to three units with no rezoning required.

The typical mix is the main home + one interior suite (basement apartment) + one detached accessory unit (garden/backyard suite). (Source: Ontario.ca)

You Still Need a Building Permit

‘As-of-right’ removes the rezoning step — not the building permit. Every added unit needs a building permit and full compliance with the Ontario Building Code. Building without a permit risks fines, demolition orders, voided insurance, and problems when you later sell.

Key Basement Suite Requirements

• A separate entrance
• Code-compliant egress windows
• Smoke and carbon-monoxide detection
• Code-compliant ceiling height (typically around 1.95 m minimum)
• Fire separation, sound separation, and other code requirements

A basement suite is usually faster and cheaper to build — a common first step for landlords.

The Garden-Suite Trade-off

A detached garden suite offers more privacy and typically commands higher rent, but costs more and takes longer than a basement build. One lot can have both a basement suite and a garden suite to reach the three-unit total.

Provincial legislation permits three units, but municipalities still control setbacks, maximum lot coverage, height limits, design guidelines, and servicing (water/sewer) capacity. Some still require extra review for garden suites. Confirm your city’s specific rules with planning/building staff before you build.

Q: How many units can one Ontario residential lot have now?

Under Bill 23, most residential lots can build up to three dwelling units as-of-right — typically the main home, an interior suite (such as a basement apartment), and a detached unit (such as a garden suite) — with no zoning by-law amendment.

Q: Do I still need a building permit for an added unit?

Yes. ‘As-of-right’ removes rezoning, but every added unit needs a building permit and must meet the Ontario Building Code. Building without one risks fines, demolition orders, and voided insurance.

Q: Basement apartment or garden suite — which is better value?

A basement suite is usually faster and cheaper, good as a first step. A garden suite offers more privacy and higher rent but costs more and takes longer. One lot can have both, for three units total.

Q: If the province allows it, can the city still restrict it?

Yes. The province permits three units, but municipalities still control setbacks, coverage, height, design guidelines, and water/sewer capacity. Confirm local rules with planning/building staff before starting.