Ottawa is relaxing mortgage rules to stimulate the construction of accessory dwellings, such as parental dwellings.
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From January 15, owners will be able to remortgage their home up to 90% of its projected value after the work, with a maximum amortization of 30 years and an upper limit set at $2 million, detailed Finance Minister Chrystia Freeland , Tuesday.
An example of a qualifying accessory dwelling unit – sometimes called a “master suite” – would be the conversion of an underutilized basement or large unused space in the backyard or side of the property.
Although it can be used to get closer to a family member, an owner can also request rent from foreign tenants, provided they do not use it for short-term rentals on platforms like AirBnb.
The federal government has imposed other conditions on refinancing.
First, the owner or one of his or her close relatives must live in one of the already existing units affected by the addition of the accessory dwelling unit.
Then, the entire property cannot exceed four residential units after the work is completed. In other words, a one-unit property can add a maximum of three units.
Then, these must be “fully autonomous”, that is to say that the new housing must have its own entrance and comply with municipal zoning.
The idea behind this new measure is to involve homeowners in the “great national effort” to accelerate the construction of homes, Minister Freeland said.
