This is for educational purposes only; it does not guarantee future performance or serve as financial, legal, or tax advice.
Toronto’s real estate scene is heating up again — sixplexes are now legal in parts of Old Toronto and East York, and the City just waived development charges on all six units citywide.
But don’t get carried away. These projects are complicated, expensive, and not low risk. They’re not the right move for most investors unless you really know what you’re doing.
A Quick Timeline of “Missing Middle” Progress in Toronto
To understand how we got here, here’s a timeline of key changes:
- 2019: Laneway suites approved
- 2022: Garden suites approved
- 2023: As-of-right multiplex zoning passed (up to 4 units)
- 2024: Mid-rise Major Streets initiative launched — currently delayed due to appeals
- 2025: Sixplexes approved for 9 wards (Toronto & East York plus Ward 23); DCs for up to 6 units waived
What’s Actually Approved Now?
- Sixplexes allowed in 9 wards (Toronto and East York – indicated in green above, plus Ward 23) with DCs waived — a major policy shift.
- Side-by-side fourplex semis are still allowed without rezoning hassles.
- You can build a fourplex + ADU (laneway or garden suite) simultaneously and avoid DCs on the ADU.
- Bedroom caps now limit total bedrooms per building, which affects your design flexibility and unit mix.
New Rules, New Limits: Bedroom Caps Now Apply
The City has now capped the total number of bedrooms per building — not per unit. This isn’t necessarily a win or loss, but it does impact design flexibility.
It’s the City’s way of discouraging rooming houses while still allowing multi-bedroom rentals — but for investors, this adds one more constraint to factor into your layout and unit mix.
- 2-units: Max 8 bedrooms total allowed across both units.
- 3 or more units: Max 3 bedrooms per unit on average (so total bedrooms = 3 × number of units). Example: In a 4-unit building, you’re allowed up to 12 bedrooms total.
You can distribute bedroom counts however you want across units, as long as you don’t exceed the overall cap.
Example 2: 3-Unit Multiplex (Max 9 Bedrooms Total)
- Unit 1: 4 bed
- Unit 2: 3 bed
- Unit 3: 2 bed
Frequently Asked Questions
Do Development Charges (DCs) apply to 6-unit builds?
No. The City of Toronto now waives DCs for up to 6 residential units per lot — this includes any combo of multiplex units and a laneway or garden suite. Example: If you build a 4-plex + 1 laneway + 1 garden suite = 6 units → DCs waived for all 6.
Can I build a 6-plex + a backyard house (7 units total)?
Yes — but with limitations. You can do 6 units in the main house plus 1 backyard suite (laneway or garden) in 9 wards (indicated in green in the map above, plus Ward 23). But you’ll need to meet zoning, size, separation, and fire access rules. This isn’t automatic, and many lots may not qualify.
Can I build a laneway or garden suite before the multiplex?
Yes. The City now allows ADUs (accessory dwelling units) to be built before, after, or at the same time as the main house. You won’t lose your DC waiver on the main units by building the ADU first.
Are DCs waived or deferred for the ADU?
If your total unit count is 6 or fewer, DCs are waived, including for the laneway/garden suite.
If you build 7+ units, the ADU is not exempt anymore, but you can apply for a DC deferral on the ADU. The deferred charge will be waived only if you keep the ADU as a rental for 20+ years.
Are the first 6 units DC-free if I build more than 6?
Yes. The first 6 units per lot are DC-exempt. But any unit beyond 6 will cost you — about $50K per extra unit in DCs. Example: Build 10 units = pay DCs on 4 units → approx. $200K in charges.
Do educational development charges still apply?
As of December 3, 2023, the TCDSB set residential EDCs at $3,293 per new dwelling unit (through Dec 2, 2024). This rate rises annually, reaching $3,593 in 2025, and up to $4,493 by 2028.
•Detached homes: First 3 units are exempt. Fees apply to any units beyond 3.
•Semi-detached homes: First 2 units are exempt. Fees apply to any units beyond 2.
Should You Even Build a Sixplex in Toronto?
Here’s the real talk: just because you can build a sixplex doesn’t mean you should.
Why? Bigger DCs, longer timelines, and smaller resale buyer pools.
We lean toward smaller, phased projects — especially 3+1 conversions. You can:
- Use residential financing
- Avoid DCs
- Tap into a broader resale market (house hackers, families, end users)
- Recycle your capital faster
- Take advantage of today’s buyer’s market without overextending
Honestly, we haven’t even seen fourplexes sell consistently in Toronto yet — so sixplexes will be even harder to move on the back end.
Bottom Line: Don’t Overreach
The updated rules are a step in the right direction. But the sweet spot is still in small, strategic builds that minimize friction and maximize return.
Focus on:
- Properties you can refinance residentially
- Projects you can complete quickly and resell (if needed)
- Neighbourhoods with proven rental demand and exit potential
Thinking About Buying or Converting a Multiplex in Toronto?
If you’re serious about investing in Toronto’s missing middle — whether you want to buy something turnkey or convert an existing property — book a free strategy session with our team.
We’re a real estate sales brokerage that works primarily with Toronto multiplex investors. Here’s how we help:
- Deal Search: We’ll find you off-market and MLS deals that actually cash flow.
- Renovation Support: Need to convert or add units? We’ll connect you with vetted contractors and help you budget realistically.
- Leasing & Management: We can help you fill your units and manage them too.
- Refinance Guidance: We’ll walk you through resale and refinance strategies that maximize ROI.
Let’s help you buy smarter, build faster, and scale sustainably in Toronto’s evolving real estate market.
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!
