– Aims to provide more affordable housing options by encouraging homeowners to create secondary suites, such as basement suites, garden suites, or laneway homes.
– One key feature is the provision of 50% forgivable loans. Homeowners can receive up to 50% of construction, design, and implementation costs, with a maximum forgiveness cap of $40,000. So if it costs you $80,000 to build a secondary suite, the program will forgive 50% or $40,000 of that cost. The forgivable loan is registered on the title, and it is repaid over five years, with 20% forgiven annually. Applications for the Secondary Suite Incentive Program will open in April 2024 and will be processed on a first-come, first-served basis. Click here SSIP Details
Eligibility Criteria:
- Homeowners must be Canadian citizens or permanent residents.
- The property’s market value must not exceed $2.125 million.
- The combined gross annual income of homeowners on the title should be below $209,420.
- The property must be their primary residence.
Program Benefits:
- Forgivable Loans: Homeowners can receive forgivable loans of up to 50% of the construction, design, and implementation costs, with a maximum forgiveness cap of $40,000.
- Rental Requirements: Homeowners are required to rent out the secondary suite at rates below the rental cap set by the BC government for a minimum of five years.
- Application Process: Applications for the program will open April 17 2024 and will be processed on a first-come, first-served basis. Homeowners must confirm their eligibility and comply with municipal zoning regulations before applying.
Key stipulations:
- A new legal self-contained unit with a kitchen and full bathroom (improvements to existing rental units are not eligible)
- Laneway homes/garden suite are eligible
- Received municipal building permits on or after April 1, 2023
- The suite must be rented out BELOW the rental cap set by the BC govt for a minimum of five years
- the tenant must not be related – Cannot rent to immediate family members, friends, or spouses
- eligibility for the program has been expanded to 16 regional districts
The catch of the program is that you MUST rent out the suite for FIVE YEARS at BELOW MARKET RATES. The set rates differ by region – see Government rental caps.
For example; the government sets the maximum cap for a 2 bedroom suite in the Greater Vancouver area at $1894 per month. By comparison, a newly built legal basement suite in Coquitlam will rent for at least $2400+. So a minimum $500 per month shortfall = $30,000 less revenue over 5 years
Summarizing; spend $80,000, get back $40,000 and lose $30,000+ in revenue. Speaking financially, there does not appear to be a big upside to it for the homeowner.
Add to this the downside of having to deal with a tenant that is still there after the 5 years are up and you now have to deal with BC’s Landlord/Tenant diktats, which will mean you will be renting below market until that tenant leaves.