Key takeaways
- A legal basement ADU in the GTA typically costs $80,000 to $175,000, and a garden suite or laneway house about $200,000 to $400,000.
- Our legal basement ADUs start at $80 per square foot, and our complete garden suite and laneway house packages start at $199,999.
- City of Toronto permit data puts the median declared garden suite cost at $180,000 and the average at about $260,000, so treat declared values as a floor.
- Most ADUs are exempt from development charges, and Toronto permit fees for a 60 m² garden suite are about $1,170.
- Renting a detached suite to someone who is not a relative can mean self-assessing HST on its fair market value, so speak to an accountant first.
- CMHC’s insured refinance allows up to 90% of the property’s value after the work, on homes under $2 million with up to four units.
Short answer: in Toronto and the GTA, a legal basement ADU typically costs $80,000 to $175,000, and a detached garden suite or laneway house typically costs $200,000 to $400,000. An in-law suite built as an addition usually runs $80,000 to $200,000. At Remodel My Home, legal basement ADUs start at $80 per square foot and complete garden suite and laneway house packages start at $199,999. Development charges do not apply to most ADUs, but a detached suite rented to a non-relative can bring an HST bill that many budgets miss.
The type of ADU matters far more than the city it is in. This guide compares every type side by side, explains what moves the price within each, lists the soft costs and fees, and sets out the financing and tax rules that apply in 2026. Our figures come from projects we quote across the GTA; outside figures are from the City of Toronto, CMHC and the Canada Revenue Agency and were checked in October 2026.
ADU costs at a glance
| ADU type | Typical GTA cost | Our pricing | Why it costs what it does |
|---|---|---|---|
| Legal basement ADU | $80,000 to $175,000 | From $80 per sq ft | Foundation, structure and services already exist. Ceiling height, entrance and windows drive the total. |
| Interior or in-law suite | Depends on the space | Quoted after a site visit | Like a basement unit, but upper floors bring stairs, sound separation and plumbing runs into play. |
| Addition-based in-law suite | $80,000 to $200,000 | Quoted after a site visit | New foundation, walls and roof, tied into the existing house. |
| Garden suite (Toronto) | About $200,000 to $400,000 | Packages from $199,999 | A small detached house: foundation, roof, envelope, servicing and fire access. |
| Laneway house (Toronto) | About $200,000 to $400,000 | Packages from $199,999 | As for a garden suite, usually with easier site access from the lane. |
For a sense of scale, a 1,000 square foot basement starts at about $80,000 as a legal unit at our rate, before items such as underpinning, a new entrance or waterproofing. City of Toronto permit data puts the median declared construction cost of a garden suite at $180,000 and the average at about $260,000, and the average declared laneway suite at about $300,000. Declared values are estimates made at application, so treat them as a floor.
Basement ADUs: what moves the price
A basement is usually the least expensive place to add a unit, but the range is wide because a few hidden items can double the budget:
- Ceiling height. A legal unit in a two-unit house needs 1.95 m of clear height, or 1.85 m under beams and ducts. If the basement is lower, the floor has to come down by underpinning or a bench footing, which published 2026 sources put at $30,000 to $80,000 or more.
- The entrance. The Building Code does not require a separate entrance, but most owners want one, and a new below-grade entrance with stairs runs about $30,000.
- Windows. Each bedroom needs a window with at least 0.35 m² of clear opening, and enlarging or cutting one is a significant line item.
- Drains and water. A kitchen or bathroom with no rough-in means cutting the slab, and fixtures below the sewer line need an ejector. Any water problem has to be fixed before finishing.
- Separation and alarms. A 45-minute fire separation, or in a two-unit house a continuous smoke-tight barrier of 15.9 mm Type X drywall, plus interconnected smoke and carbon monoxide alarms. Houses at least five years old have cheaper compliance alternatives.
Our basement renovation cost guide prices each of these line items and lists the flood-protection subsidies that offset part of the work.
Garden suites and laneway houses: what moves the price
A backyard suite is a small house, so it costs more than a basement unit but gives a tenant or family member far more privacy. The main cost drivers are:
- Size and storeys. In Toronto a garden suite can be up to 60 m² on one storey or 120 m² on two. A second storey adds a stair and structure but is often the best value per square foot.
- Servicing. Water and sewer usually connect through the main house. A long run, a deep sewer or an electrical service upgrade adds cost.
- Fire access. If the path from the street is long or narrow, the suite may need a sprinkler system or upgraded fire-resistant construction.
- Trees and site access. Protected trees can require arborist reports or special foundations, and materials that must come through a narrow side yard take longer to move.
Our garden suite and laneway house cost guide covers these in detail, including what our $199,999 starting package assumes.
Soft costs and fees
Construction is not the whole budget. Plan for:
- Design and drawings by a BCIN-qualified designer, an architect or an engineer. Toronto’s pre-approved garden and laneway suite plans are free, but you still need a site plan and grading plan, and the design cannot be changed.
- A survey for any backyard suite or addition.
- Building permit fees. Usually small. In Toronto, a basement apartment is $11.53 per m² of the area affected plus $56.33 per new unit, and a new garden or laneway suite is $18.56 per m² plus $56.33, so about $1,170 for a 60 m² suite.
- A minor variance, if the design does not fit the zoning, plus any tree or conservation authority permits.
- Registration where your city requires it: for example $200 in Brampton, $500 in Pickering, and $246 plus a $429.50 inspection in Markham.
- A contingency of 10 to 15%, more in an older house.
Two things you generally do not pay. Under the Development Charges Act, the second unit, a third unit in the house and one unit in a backyard building are exempt from development charges. And Ontario law caps parking at one space per additional unit, with Toronto and Mississauga requiring none, so most ADUs do not need a new parking pad.
The HST cost most budgets miss
CRA’s GST/HST Info Sheet GI-168 deals with exactly this situation. If you build a detached suite, such as a garden suite or laneway house, and rent it to someone who is not a relative, you are generally treated as a builder and must self-assess HST on the suite’s fair market value once it is rented. A new residential rental property rebate may recover part of it, and building the suite for a relative generally does not trigger self-assessment. On a $250,000 suite, the difference is large enough to change the business case, so get advice from an accountant before you sign a contract. A basement unit created inside an existing house is usually treated differently, but confirm your own situation.
What an ADU can earn
There is no reliable published data on rents for basement or backyard units specifically. The closest benchmarks are CMHC’s rental surveys: its October 2025 survey of purpose-built apartments put the average one-bedroom at $1,761 a month and the average two-bedroom at $2,046 across the Toronto area, and CMHC’s condo data put the average two-bedroom condo at about $2,900. Price your unit against current local listings for similar self-contained units. Rents across Toronto have been falling for two years, so plan on today’s figures rather than 2023’s.
Paying for an ADU
- CMHC’s insured refinance. Owner-occupiers adding a legal unit can refinance up to 90% of the property’s value after the work, if that value is under $2 million and the property has no more than four units, with up to a 30-year amortization. Rentals under 90 days are not allowed. Our suite financing guide works through an example.
- Multigenerational Home Renovation Tax Credit. For a unit built for a family member who is 65 or older, or an adult eligible for the disability tax credit, the federal credit covers up to $50,000 of costs: 14.5% (up to $7,250) for 2025 and 14% (up to $7,000) from 2026.
- Home equity. A line of credit or refinance against the existing house is how most owners fund the rest.
- No federal suite loan. The $80,000 Canada Secondary Suite Loan Program was cancelled before it launched, and there is no province-wide ADU grant in 2026.
How to keep an ADU on budget
- Measure the basement ceiling first. If it is below 1.95 m, the floor height decides the budget before anything else does.
- Check fire access before designing a backyard suite. The path from the street decides whether a sprinkler or upgraded construction is needed.
- Use existing rough-ins and keep wet areas close to the main stack.
- Design to the zoning. A design that needs no variance saves fees and months.
- Get an itemized, fixed quote so you can see what is included and compare like with like.
Get a real number for your ADU
We design and build ADUs across Toronto and the GTA: legal basement units and in-law suites throughout the region, and garden suites and laneway houses in Toronto. Book a free assessment for an itemized estimate, and see our ADU design-build services.
ADU cost FAQs
How much does an ADU cost in Toronto?
A legal basement ADU typically costs $80,000 to $175,000, and a garden suite or laneway house about $200,000 to $400,000. Our basement ADUs start at $80 per square foot and our backyard suite packages at $199,999.
What is the cheapest type of ADU?
Usually a basement unit, because the foundation, structure and services already exist. It becomes expensive when the floor has to be lowered or a new below-grade entrance is needed.
Is an ADU cheaper than an addition?
A basement ADU usually is. An in-law suite built as an addition typically costs $80,000 to $200,000, because it needs a new foundation, walls and roof tied into the house.
Do I pay development charges on an ADU?
Not in most cases. The Development Charges Act exempts the second unit, a third unit in the house and one unit in a backyard building.
Do I pay HST on a garden suite?
If you build a detached suite and rent it to someone who is not a relative, CRA’s guidance says you are generally treated as a builder and must self-assess HST on its fair market value, with a partial rebate that may be available. Speak to an accountant before you start.
How do I finance an ADU?
Most owners use CMHC’s insured refinance, which allows up to 90% of the property’s value after the work on homes under $2 million, or a home equity line of credit. A unit for a qualifying family member may also earn the Multigenerational Home Renovation Tax Credit.