Somewhat jarringly, the product will allow eligible homeowners to access up to 90% of their property’s value, including the value added by the secondary suite, with a property value limit up to $2 million.

Zakiya Kassam

October 08, 2024

04:57 PM

On Tuesday afternoon, the Government Canada announced a new insured mortgage refinancing product that lenders and insurers will be able to offer homeowners looking to add secondary suites to their properties as of January 15, 2025.

Somewhat jarringly, the product will allow eligible homeowners to access up to 90% of their property’s value, including the value added by the secondary suites. It can be used in combination with any other outstanding loans secured by the property.

Deputy Prime Minister and Minister of Finance Chrystia Freeland unveiled the new product at a press conference, where she told reporters that eligible homeowners will be able to amortize their refinanced mortgages for up to 30 years, and that the maximum property value limit is currently set at $2 million. That latter figure, she said, is “a recognition” of conditions in the Greater Toronto Area.

More eligibility parameters are outlined here, but chief among them is that there can be no more than four dwelling units on a single property, including the existing unit, and the borrower or a “close relative” must be occupying one of the current units.

“The idea here is to make it easier for people to build a secondary suite in your home, for someone to build a basement flat, a garden flat, laneway housing,” Freeland said. “This is all about gentle density — creating more homes for Canadians to live in. It builds on the Secondary Suite Loan Program, which was announced in the Budget.”

The secondary suite item is just one of three housing actions announced by the federal government on Tuesday. According to a press release, the feds have also launched consultations on the taxation of vacant land and are “seeking feedback from provinces, territories, and municipalities that are interested in implementing their own vacant land taxes.” In addition, they have added 14 underused federal properties to the Canada Public Land Bank, and those have been “identified as suitable for building new homes.”

“The federal government is delivering on its ambitious plan to build four million homes by using all tools at its disposal,” the release said. “The actions announced today are about maximizing the use of available land in our communities — turning unused basements, empty lots, and underused federal offices into homes — to build a country where everyone has access to a home they can afford.”

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