This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
Toronto quietly became a far better market for small-scale development — and most investors haven’t caught it yet. The OLT appeal that was holding up the new garden suite by-law has now been scoped down to a single property, which means the updated rules are officially live city-wide.
This matters because these are not small technical tweaks — these changes directly affect what you can build, where you can build, and how much rentable square footage you can legally create on the same lot. More buildable envelope means more income, and more income means stronger refinancing power, which ultimately drives scale. Here’s what that means in practical terms for Toronto real estate investors.
Why These New Garden Suite Rules Are More Permissive
The biggest unlock is how size is now calculated. Garden suites are no longer measured by interior floor area — they’re measured by gross floor area (GFA), and the basement no longer counts toward that cap. That means the original 60 sqm limit for a single-storey or 120 sqm for a two-storey suite is still the number, but the usable livable area is now significantly higher because anything below grade is a “free” add-on.
Before this change, the basement ate into your cap, mechanical rooms reduced interior space, and wall thickness squeezed your final usable square footage. Now, basement space is excluded altogether, which gives investors more rentable area for the same legal structure. That’s effectively extra profit baked into the new by-law.
BEFORE
NOW
More Design Flexibility and Usable Second Storey Space
The old 45-degree angular plane rules often forced awkward massing and shaved off the second storey, killing efficiency and layout quality. Those planes have now been removed and replaced with a much more lenient roof slope standard. Combined with the slight height increase from 6.0m to 6.3m, the second storey is now far easier to build without losing volume.
This means your second floor can actually function like a real unit rather than a compromised attic-style layout. For investors, that translates into better bedroom configurations, more privacy separation inside, and higher rent ceilings.
Smaller Lots Now Qualify — And That’s a Bigger Game Changer Than People Realize
Another major shift is separation distance. A one-storey garden suite now only needs 4 metres from the main building instead of 5 metres. That may sound minor, but it suddenly brings shallower lots into play. For many Toronto investors who were previously disqualified based on lot depth alone, this opens the door to basement + single-storey construction even on smaller urban lots.
This is exactly the kind of change that increases the number of properties where value-add opportunities exist — without requiring a severance or a major rezoning process.
Expanded Lot Coverage Means More Buildable Envelope Overall
The City has now aligned with provincial standards by allowing up to 45% total lot coverage across the entire site. Previously, coverage was capped based on the rear yard only, which constrained usable envelope in ways that made some lots technically eligible but not economically viable. Now, investors have more flexibility in how a garden suite is positioned and massed, especially on irregular or pie-shaped lots.
This expanded footprint means more freedom during design and a better chance to optimize income on a case-by-case basis — something that was meaningfully harder before.
How We Can Help
These rule changes are not cosmetic — they’re structural. They expand eligibility, increase rentable space, and improve the economics of refinancing and scaling inside Toronto’s multiplex market. If your lot didn’t pencil out six months ago, it may now qualify — and for a bigger build than before.
You don’t need to know how to find these opportunities or where to start. That’s where we come in. At Elevate Realty, we don’t just show listings — we act as your advisor, planner, and coach. We’ll walk you through the process from acquisition to management so you can invest with confidence.
Our brokerage specializes in Toronto multiplexes. We’ll help you find deals, crunch the numbers, and guide you through renovations and management.
If you want full support in Toronto multiplex investing, our team can help you:
- Find high-potential properties
- Crunch the numbers so you know exactly where you stand
- Coach you through renovations to maximize returns
- Lock in great tenants
- Provide full property management so your investment runs smoothly
Want to see what’s possible for you? Book a strategy session with us here.
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
