I’m a homeowner in Toronto. I have an adult child who is struggling to purchase their first home. I’ve been doing some research on laneway housing – If I add a laneway house to my property, am I allowed to sell it to my child?

With home prices on the rise and increasing rental rates in the city, many people are exploring new and innovative options to renovate and develop land they currently own. Laneway housing is an interesting, and evolving option in larger metropolitan areas, like Toronto and the surrounding area. I am excited to have received a question on the topic.

I am going to preface this Ask Joe by stating that laneway housing, also referred to as laneway suites, is very much in its early days and may not be permitted by local municipalities, so I encourage readers to verify information, and to check and double check local rules, zoning, by-laws and permit requirements for their specific property.

To your question, to my knowledge, you can’t sell a laneway house separately from the main property it resides on, but that is not to say you never will be able to in the future.

Defined as, self-contained residential units located on the same lot as a detached house, semi-detached house or townhouse, a laneway home, is generally located in a rear yard next to a laneway. Laneway suites are typically smaller in scale and completely detached from the main house on the property.

While still in its infancy, laneway housing is an option that homeowners and some municipalities are exploring through varying lenses. A popular option is to do what you’re doing: creating a multi-generation property, but distinctly different than having an on suite or apartment within the main home. Others are evaluating their long-term investment potential, and more are weighing their validity as an income generator. There is plenty of potential.

In your research you have likely uncovered that on June 28, 2018, Toronto City Council passed official plans and by-law amendments allowing laneway housing within select parts of greater Toronto – then in 2019, additional changes were made to permit them in all of Toronto. Laneway development is viewed as an innovative and promising move that could accommodate more people in a city faced with a decline in land available for development and increasing housing costs. Other municipalities are no doubt considering similar changes, if they haven’t already.

I recommend discussing your options with a registered real estate professional, real estate lawyer, your lender and a builder or developer knowledgeable in laneway housing to help you make an informed decision.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

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