Skip to content
Join our Newsletter

B.C. offers homeowners up to $40K to build secondary suites. Here's what you need to know

Homeowners must rent the suites at below-market rates for five years for eligibility.
The B.C. government plans to incentivize homeowners to build secondary suites on their property with a new three-year pilot program. DARREN STONE, TIMES COLONIST

The B.C. government is offering homeowners up to $40,000 to build a secondary suite as part of a new program aimed at boosting the supply of affordable housing across the province.

The three-year incentive program, announced Monday by Premier David Eby and Housing Minister Ravi Kahlon, will accept applications beginning in spring.

About 3,000 eligible homeowners will be offered forgivable loans of up to $40,000 to help pay for construction costs for basement suites, garden suites or laneway homes on their property.

But there are requirements. Here’s what you need to know about B.C.’s new secondary suite incentive program.

Who is eligible?

You must be a Canadian citizen or permanent resident.

The home must be your primary residence. Your household’s combined income should not exceed $209,420.

The property cannot be worth more than $2.125 million, and owners should have enough home equity that can be leveraged as security for the loan.

What type of suites are eligible?

A secondary suite is a self-contained unit that has its own kitchen, bathroom and sleeping facilities contained within the dwelling. Standalone suites such as laneway homes and garden suites on the same property and title are also eligible.

The loan cannot be used toward renovations or improvements to existing rental units.

The owners must have received municipal building permits for the suites on or after April 1, 2023.

The cost to build the suite must be a minimum of $20,000.

How do I apply?

Applications open April 2024.

Once eligibility is confirmed and a secondary suite will comply with municipal zoning laws, you can apply for a building permit and start the build.

When construction is complete and the occupancy permit has been issued, you can submit the occupancy permit and proof of construction costs to receive the loan. The loan will be registered on title for five years as a forgivable loan, which doesn’t need to be repaid if the homeowners fulfil the terms of the program.

How much can I get?

Eligible homeowners can receive forgivable loans for 50 per cent of construction costs to a maximum of $40,000. The loan is given to the homeowner after construction is complete. The loan will be forgiven over five years if program requirements are met.

Costs eligible for the loan include: Architectural and design fees; electrical work; fixtures and appliances; building and trade permit fees; materials and contractor labour.

What are the requirements for the loan to be forgiven?

You need to rent out the secondary suite at below market rates for at least five years.

The rates are set by B.C. Housing. In Vancouver, the maximum rental rate you can charge in 2023 would be $1,500 for a one-bedroom or studio; $1,894 for a two-bedroom; and $2,200 for a three-bedroom.

In addition, you can’t rent the secondary suite to immediate family members, such as a spouse, child, parent or sibling.

The suite must be rented for at least 10 months in a year according to a rental agreement that complies with the Residential Tenancy Act.

If you meet the requirements, the B.C. government will forgive the loan at 20 per cent per year over five years, or up to $20,000 a year.

What happens after five years?

After the loan has been fully forgiven, there are no restrictions on what rent you can charge a new tenant. For existing tenants, you can increase rent to the maximum allowable threshold set annually by the provincial government.

What if I fail to meet the criteria before the five years?

If you don’t meet the program requirements within the five-year period — such as if you sell the home, move to another primary residence, or want to charge rents at market value — you’d be on the hook for any outstanding principal balance and interest on the loan.

Is there a deadline to apply?

Applications will be approved on a first-come, first-served basis until the funding is used. The B.C. government expects at least 3,000 homeowners to get the incentive over three years.

Further information can be found through the BC Housing website. The province has also created Home Suite Home, a 58-page guide on how to add and manage a secondary suite in B.C.

[email protected]