Secondary Suite Incentive Program

How do I know if I qualify and how will I get approval?

Successful applicants will receive confirmation from BC Housing with their approval and requirements for next steps including additional documentation that will be required once an occupancy permit is issued in order to receive the rebate. 

What are the terms of the forgivable loan?

The rebate amount and BC Housing’s legal costs of $2,000 will be registered on title for 5 years as a forgivable loan. 

The forgivable loan, inclusive of BC Housing’s legal costs, will be forgiven at 20% each year (i.e., up to $8,400/year, plus all accrued interest) that all program requirements are met:

• The property continues to be the Principal Residence of the owner(s)
• The secondary suite was rented for at least 10 months in the preceding year and the tenancy is under an agreement that complies with the Residential Tenancy Act (RTA) on a month-to-month or minimum 1 year fixed term tenancy
• The rent for the secondary suite is at or below the Rent Affordability Limits established by BC Housing annually
• The tenant is not an immediate family member (spouse, child, parent or sibling) of the homeowner(s)

Below is an example of how the forgivable loan would work based on a homeowner who receives the full $40,000 rebate:
 

Is there interest on the loan and do any payments need to be made?

Interest will accrue based on the current prime rate of interest charged by the Royal Bank of Canada, plus 2.00%.

The Principal Amount will be forgiven at a rate of 20% every year. This will start on the first anniversary of the date of receiving the Loan funds from BC Housing, subject the homeowner complying with all of the terms and conditions of SSIP.

If the Principal Amount is forgiven at 20% each year, any interest accrued to the date of such forgiveness will also be forgiven. 

There are no payments required on either the principal or interest during the forgiveness period if the homeowner complies with the terms and conditions of the SSIP loan. In the event the homeowner does not comply with all the terms and conditions, the loan and any interest that has accrued, will become payable on demand to BC Housing.

What are the BC Housing legal fees?

The SSIP mortgage will secure the rebate amount plus an additional $2,000 for BC Housing's legal fees, including disbursements and taxes for preparing and discharging the mortgage upon forgiveness. Homeowners must cover any legal costs incurred by their counsel for completing the mortgage documentation. SSIP will not cover legal fees for the client's notary or legal counsel for mortgage registration.

Can I represent myself for the registration of the mortgage?

No, according to Section 42(1) of the Land Title Act, "The execution by a transferor of an instrument must be witnessed by an officer who is not a party to the instrument." Therefore, you must engage a lawyer or notary public to witness your signature for the SSIP loan registration.

What costs are eligible for the rebate?

Costs to be covered by the rebate must be directly related to the creation of the secondary suite and include:

• Architectural and design fees
• Structural modification
• Electrical work
• Fixtures
• Appliances (50% of actual cost to a maximum of $2,500)
• Building and trade permit fees
• Costs to obtain certificates, drawings and specifications directly related to eligible scope of work
• Materials related to the approved construction
• Contractor labour (not including work done by Applicant or any member of the Household)
• PST and GST 

The following costs will not be eligible: 

• Extensions, conversions, repair or replacement of items for the homeowners
• Labour costs for work completed by the homeowner
• Tools purchased or rented by the homeowner
• Landscaping costs
• Legal fees

Is there a minimum amount to be eligible?

The minimum loan under this program is $10,000.

To qualify for this program, the cost to create a secondary suite on your property will need to be $20,000 or more.

Is it possible to get pre-approved for the rebate before incurring costs towards getting a permit or construction?

No, to be eligible for the program, we need a copy of your approved municipal permits.

I just completed a secondary suite or am in the process of building a secondary suite. Am I eligible?

The program is available to homeowners who meet the eligibility criteria and who received a building permit on or after April 1, 2023.

What happens after the five-year period? Can I charge market rent for the suite after that?

Landlords must continue to follow their obligations under the Residential Tenancy Act. Landlords in B.C. can issue annual rent increases to existing tenants based on the maximum allowable increase posted by the Residential Tenancy Branch each year.

After the loan has been fully forgiven, there is no restriction on what rent can be charged when entering into a rental agreement with a new tenant, consistent with the Residential Tenancy Act.

What is a principal residence?

A principal residence is the home where an owner lives permanently for at least six months per year and is the residential address the use for things such as tax returns, vehicle registration and their government-issued identification.

What kind of suites are eligible? Can I build a laneway house?

Yes. Eligible projects must be on the primary residence property. It can include secondary suites attached to the primary residence and laneway homes/garden suites as long as both units remain on the same title.

The new unit must be self-contained, with access to living facilities for daily activities such as cooking, sleeping and receiving mail.

Do mobile home, RV or 5th wheel qualify?

No, the program is available for creation of new self-contained units.

What does “below market value” mean?

To be considered affordable rental and eligible under the BC Secondary Suite Incentive Program, the tenant’s rent must not exceed the Rent Affordability Limit for your area.

Are there requirements for who I can rent my secondary suite to?

The tenant for the secondary suite cannot be an immediate family member (child, parent or sibling) of the homeowner(s).

What documents will be needed for the online application?

You will need the following documents to apply:

• Identification (BC Driver’s License, BC Service Card)
• Proof of Canadian citizenship or permanent residence (e.g., passport, birth certificate, permanent resident (PR) card)
• Proof of income (Income Tax Notice of Assessment)
• Proof of residency in the home to be modified (e.g., driver’s license, utility bill)
• Approved Building Permit from your municipality
• Estimated cost of construction (contractor quotes or other documents supporting estimated cost)

What happens if I get the rebate but then no longer meet the criteria before the end of the five-year period?

Should you no longer be eligible for the program for any reason, you would be responsible for repaying any outstanding principal balance and interest accrued.

This could be for several different reasons, including a sale of the property during the forgiveness period, or no longer meeting the terms and conditions of the forgivable loan (e.g., no longer the homeowners’ primary residence, rent is no longer below market value, etc.). 

Do I need home warranty insurance on my new suite to be eligible for SSIP?

Home warranty insurance is not required for a suite constructed within the main residence (e.g. a basement suite). It is at the discretion of the homeowner whether they want to obtain a warranty on their new suite.

A standalone Accessory Dwelling Unit (ADU) (e.g. a garden suite or laneway home) meets the definition of a “new home” under the Homeowner Protection Act, and therefore must be built by a licensed residential builder and must be covered by home warranty insurance. Homeowners should check with their insurance provider regarding the implications of constructing and renting a secondary suite.

In addition, Section 4.1 (2) of the Homeowner Protection Act requires owner-builders (licenced homeowners who build the ADU themselves) to use the ADU for personal use for at least 1 year from the date of first occupancy of the new home. As a result, a homeowner who wants to build an ADU can apply for SSIP, but they are not eligible to have their SSIP mortgage forgiven in the first year.