What is an ADU?
A second, self-contained home on a property that already has one house on it, with its own kitchen, bathroom, sleeping space and entrance. Ontario’s official term is ARU (Additional Residential Unit). You’ll also hear “second suite” or “in-law suite.” They all mean the same thing.
An ADU needs 3 things.
A bedroom or sleeping area. Below grade, a bedroom usually needs a window big enough to climb out of in an emergency.
Its own cooking space: a stove, a sink and a fridge, not shared with the main house.
Its own toilet, sink and shower or tub, reached from inside the unit.
1 / 3 checked
What kinds of ADU are there?
Two physical forms: a basement apartment inside the house, or a garden suite in a separate building in the backyard. Everything else (laneway house, coach house, in-law suite) is a variation on one of these.
Basement apartment
Inside the main house
Garden suite
A separate structure in the backyard
| Compare | Basement apartment | Garden suite |
|---|---|---|
| Where it is | Inside the main house (basement, sometimes main floor) | A separate, detached building in the backyard |
| Also called | Second suite, in-law suite | Laneway house, coach house, backyard home |
| Typical cost (2026) | $80,000–$175,000 | $200,000–$300,000 |
| Typical timeline | Faster, you’re working inside an existing structure | Slower, it’s new construction from the ground up |
| What it needs | Ceiling height, a proper egress window, fire separation | Its own foundation, servicing, setbacks from the property line |
| Good fit for | Rental income at the lowest upfront cost | A fully private, standalone unit |
This table is the 30-second version. See Basement Apartment vs. Garden Suite for the full comparison.
Can my property have one? Almost certainly, but we check first.
Ontario’s Planning Act requires municipalities to allow up to three residential units as-of-right on most serviced urban lots, meaning no rezoning application or committee hearing for a basic setup. But “as-of-right” still leaves room for municipal detail on top: size, coverage, parking, setbacks. That’s why the first real step is always a property-specific check, not a general answer.
check property --units 2
- SpaceIs there enough room for the new unit?✓ pass↳ Ceiling height and floor area work
- Lot rulesDoes the zoning allow the size and location?✓ pass↳ Second unit allowed as-of-right
- Building CodeCan the design meet fire, exit and ceiling rules?⚠ fix↳ Bedroom window too small to climb out of
- ServicesCan plumbing, HVAC and electrical support it?✓ pass↳ Panel and heating can carry a second unit
Looks possible. 1 item to fix before drawings.
Why do people build one?
Usually for one of two reasons: homeowners want help with the mortgage or space for family, and investors want more rental income from the same lot.
More space for family
Most homeowner clients aren’t investors, they’re using an ADU as a mortgage helper. Rental income from the basement (or a garden suite) offsets a real chunk of the monthly carrying cost, or it houses a parent, adult child, or caregiver.
For homeowners InvestorMore rental income
For investors, the math is about yield and turnaround: rent per square foot, how fast the unit gets built and rented, and whether it’s worth repeating across more than one property.
For investorsHow much does an ADU cost, all in?
Typically $80,000–$175,000 for a basement apartment and $200,000–$300,000+ for a garden suite, in 2026. Real numbers, not a lowball estimate to get you in the door.
- Basement apartment
- $80k–$175k+
- Garden suite
- $200k–$300k+
Basement apartment: depends on the current state of the basement, egress work needed, and finishes. Often lower because part of the building already exists. Garden suite: a full new structure with its own foundation and utility connections, so usually more.
These are wide ranges on purpose. The real number depends on your specific basement or lot. See Cost & Financing for what drives the price up or down, and the Cost Calculator for a property-specific estimate.
How does an ADU project work?
In four stages, roughly in this order: a feasibility check, permit drawings, permit submission, then approval and construction.
Feasibility check
Does your property qualify, and which path applies: as-of-right or legacy bylaw?
Permit drawings
The building design package your municipality needs.
Permit submission
Filed with your municipality.
Approval and build
Permit issued, construction begins.
Pick the question closest to yours.
Does my property qualify?
A self-check before you call anyone.
Second suite cost guide
Total project cost, plus HELOC, CMHC MLI Select and municipal grants.
Ontario ADU grants
What’s available, who qualifies, and how it stacks with financing.
We can tell you what looks possible.
Send us the address and a few photos of the basement or backyard. We’ll check the lot rules, the Building Code and the services, and tell you which path fits before you spend anything on drawings.