Bill 23 (2022) transformed the ADU landscape in Ontario, requiring municipalities to permit garden suites province-wide. Here is the current picture for 2026.
Garden Suite vs Laneway House
Garden suite: Detached accessory dwelling in rear or side yard. Permitted province-wide under Bill 23, overriding local restrictions. Laneway house: Detached unit fronting a rear laneway. Most common in Toronto’s older grid neighbourhoods. Requires rear laneway access.
Toronto Rules Post-Bill 23
Lots under 200 sq m: up to 60 sq m. Larger lots: up to 78 sq m. Setbacks: 1.5m from rear and side lines. Height: up to 4m (single storey) or 6m (two storey). Other Ontario municipalities have their own rules within Bill 23 parameters — check locally.
Costs in Ontario 2026
Prefabricated modular (supply and install): $180,000-$350,000. Custom-built: $250,000-$500,000+. Key variables: utility connections, foundation type, site access, municipal development charges.
Rental Income
GTA 1-bedroom garden suite: $1,800-$2,800/month. Strong rental demand in Toronto, Mississauga, and Brampton makes garden suites financially viable.
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