Everything You Need To Know About Toronto Laneway Suites!

Considering adding a Laneway Suite to your Toronto property? These additions are gaining popularity among Toronto homeowners and investors. Let’s explore the details of Toronto Laneway Suites, covering the advantages, regulations, and what’s required for construction.

What Is A Toronto Laneway Suite?

In Toronto, a Laneway Suite is like a bonus living space on your property, connected to a lane. These suites are handy for extra rental income, hosting family or friends, or creating a separate spot for yourself.

Toronto Laneway Suites are usually smaller than the main house, ranging from cozy studios to three-bedroom setups. 

Keep in mind, they’re not detachable; they stay connected to the main house for utilities like water, sewer, hydro, and gas. 

This setup ensures a smooth living experience for everyone on the property. Let’s explore the ins and outs of these unique additions!

Source: Urban Lanes


Why Should You Care About Laneway Suites As A Toronto Real Estate Investor?

Constructing a two-bedroom Laneway Suite in Toronto comes with a price tag of around $350 to $400 per square foot in hard costs. So, for a 1,000-square-foot Laneway Suite, you’re looking at an investment of at least $350,000, plus additional soft costs.

But here’s the exciting part—this investment pays off big time when you factor in potential rental income. Renting out a two-bedroom Laneway Suite in Toronto can fetch rates comparable to a two-bedroom condo, at half the cost.

As of February 2023, you can expect monthly rents between $3,000 to $3,200 for a two-bedroom Laneway Suite in downtown Toronto. That translates to a solid monthly net operating income of about $2,800 to $3,000. 

After refinancing the property post-construction with an 80% loan-to-value ratio, you could enjoy positive cash flows exceeding $1,000 per month.

Not only does this boost your rental income, but it also improves your debt-to-income ratios, potentially opening doors for more future mortgages. 

All in all, building a Laneway Suite in Toronto shapes up to be a savvy financial move for those aiming to elevate their rental earnings.

What About Value Add?

It is challenging to determine the exact value of a property with a Laneway Suite, as there is limited sales data available. 

It is safe to say that it should be worth at least what you paid for it, and likely that the property may even be worth more if you stack it against market cap rates, but we’ll need more sales transactions to confirm this in the future.

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Toronto Laneway Suite Fire Requirements

Before building a laneway suite, make sure you’re close enough to a fire hydrant and have enough clearance. If not, you won’t be allowed to build it. This should be your first step.

Maximum Distance to Hydrant: The maximum distance from the entrance of the Laneway Suite to the main road is 45 meters if fire access is via the property, or 90 meters if fire access is via the laneway. There also needs to be a maximum of an additional 45 meters from the main road to the hydrant.

Minimum Unobstructed Path of Travel: A minimum unobstructed path of travel of 0.9 meters must be maintained.

Source: Urban Lanes


Toronto Laneway Suite Footprint & Height Requirements

If your laneway suite is too small, it may not be worth the investment as there are high fixed costs involved. To make it worthwhile, it’s usually recommended to have at least a 1-bedroom plus den setup for the suite.

Maximum Footprint: The maximum footprint of the Laneway Suite is 10 meters deep by 8 meters wide.

Maximum Height: The maximum height of the Laneway Suite is 6.3 meters.

Source: Urban Lanes


Toronto Laneway Suite Setback Requirements

These additional setbacks are mandatory and necessary to comply with building codes and regulations.

Minimum Rear Setback: A minimum setback of 1 meter is required from the front of the Laneway Suite to the rear lot line, with exceptions for rear lots that do not face a lane or street.

Minimum Side Setback: There are no minimum side setback requirements, with exceptions for side lots that face a lane.

Minimum Distance From Laneway Suite To Main House: The minimum distance between the main house and the Laneway Suite building depends on the building height. If the Laneway Suite height is 4 meters or less, the minimum distance is 5 meters. If the Laneway Suite height is more than 4 meters, the minimum distance is 7.5 meters.


Source: Urban Lanes


Toronto Laneway Suite Angular Plane Requirements

For the privacy of neighbors, angular planes are required above 4 meters to ensure adequate screening and maintain a sense of seclusion.

Angular Plane Requirements: An angular plane with a maximum angle of 45° must be maintained starting from a height of 4.0 meters on the side of the Laneway Suite facing the main house.

Source: Urban Lanes


Toronto Laneway Suite Parking Requirements

The City waives all car parking requirements for the main house; however, there must be 2 designated bicycle parking spots on the property for the Laneway Suite.

Toronto Laneway Suite Landscaping & Tree Requirements

The rules for soft landscaping vary depending on the size of the property.

It is noteworthy that the removal of a tree with a trunk diameter larger than 30 cm is not allowed, and this could either determine the viability or compromise the success of the Laneway Suite construction project.

Will Your Property Qualify For A Laneway Suite In Toronto?

If you answer yes to all of these questions, your property might be a good candidate for a Laneway Suite in Toronto:

  • Does your property have a maximum distance of 90 meters to the main road from the laneway or have at least 0.9 meters side clearance if you’re accessing the main road via the property?
  • Can you get a minimum build footprint of at least 400 square feet?
  • Is your backyard free of big trees or anything else that might get in the way of the build?

Toronto Laneway Suites: Additional Resources

Due to the constantly evolving nature of building regulations, it is important to verify the latest rules with the city laws or consult with an architect before proceeding with any construction projects.

For the most up-to-date information, please refer to the following links:

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