Additional Residential Unit Incentive Program

The city will pay your eligible municipal fees up to 100 per cent for homeowners and non-profit organizations on:

• Zoning clearance certificate fees
• Building, occupancy permit and inspection fees

Education Development Charges (EDCs) may apply to detached additional residential units.
These charges are set and collected by the local school boards and are not eligible for waiver under the City’s ARU incentive program.

For questions about education development charges, please contact:

Halton District School Board (HDSB)
905-335-3663
planning@hdsb.ca

Halton Catholic District School Board (HCDSB)
905-632-6300
planning@hcdsb.org

This program falls under the Burlington housing community improvement plan (CIP) and should be considered in conjunction with the full CIP document. The forgivable loan is available to homeowners, non-profit organizations, and businesses that are the registered or assessed owners of residential properties.

If you keep the unit affordable for 10 years, your loan becomes a grant.

Incentives

• Interior/attached ARUs, including garage conversions: Up to $70,000 per new affordable rental unit.
• Detached ARUs: Up to $95,000 per new affordable rental unit.

Eligible ARU project costs include expenses directly associated with constructing the ARU and must be incurred after receiving a Letter of Intent with conditional approval from the City of Burlington.

Affordability requirements for forgivable loan:

• Rent Thresholds (2026):
  • Bachelor: $1,568
  • 1-Bedroom: $1,749
  • 2-Bedroom: $2,057
  • 3+ bedrooms: $2,380
• Affordability period: Rents must remain at or below these thresholds for the full 10-year loan agreement period.
• Annual verification: An annual submission is required to confirm ongoing compliance with program requirements.
• Reference materials: For detailed information, refer to Section 3.3 of the City’s affordable rental housing community improvement plan and the affordable residential units for the purposes of the development charges act, 1997 bulletin.

Eligible Costs

• Construction labour and materials
• Building/fire code upgrades - HVAC, plumbing, electrical, egress, insulation
• Accessibility improvements to make the design barrier-free
• Permanent finishes - drywall, paint, cabinetry up to 25 per cent of the total cost
• Professional services - architects, engineers – up to 15 per cent of the total cost

or,

• Purchase and installation of a modular or prefabricated offsite-manufactured detached unit — covered up to 100% of the total cost, excluding appliances.

Ineligible costs include — but are not limited to — expenses related to land, household appliances, and financing.

Loan terms:

• No interest
• You must register the loan agreement on title at your expense
• Annual reporting to the City of Burlington to verify continued compliance with the loan agreement
• If the property is sold before the end of the term or the agreement is breached—such as by charging rent above the average market rate—you will be required to repay the loan in part or in full

You may apply for a one-time grant of up to $15,000 to renovate a non-compliant ARU through a valid building permit. An affordability agreement is not required for this grant.
Note: This grant is not part of the community improvement plan (CIP).

Eligible costs are like those covered under the forgivable loan program.

Ineligible costs include — but are not limited to — expenses related to land, household appliances, and financing.

Applications are first-come, first-served and depend on available funding.

ARU incentive program has closed Oct. 1, 2025, at 4:30 p.m.. A valid ARU zoning clearance certificate was required to apply. 

1. Get your zoning clearance.

2. Take photos of the project area.

3. Submit your application form online.

4. Once your application is received, it will be reviewed. If approved, you will be issued a letter of intent. If not approved, you will be notified of the reason within five business days.

5. If you don’t already have a building permit, apply for your building permit (note: you can submit concurrently for your zoning clearance and building permit).

6. Finish construction, pass inspections and get occupancy permit.

7. For the forgivable loan only: Once your tenant moves in, provide us with a copy of your lease and proof of permitted occupancy. Your 10-year agreement period starts now.

8. Submit final docs: contracts (as applicable), confirmation of paid receipts (not invoices), lease, proof of home insurance, etc.

9. For the forgivable loan: sign an agreement with the City for the loan and register the charge on title.

10. Receive your payment.

Property requirements

Ownership: You must be the registered or assessed owner of a residential property.

Location: The property must be within Burlington's affordable rental housing community improvement project area. To confirm, contact planning@burlington.ca.

Financial standing

All municipal and other financial obligations related to the property—such as property taxes, utility bills, and other city-related payments—must be up to date.

Incentives

Fee waivers: Available for homeowners and non-profit organizations for ARU zoning clearance certificates, building and occupancy permits.

Forgivable Loans and legalization grant: Accessible to homeowners, non-profits, and businesses

Legal agreements

All funding recipients must enter into a legal agreement with the City of Burlington, signed by the property owner.

Affordable rent is determined by the province of Ontario. Updated in 2026, the affordable rents were:

• Rent thresholds (2026):
  • Bachelor: $1,568
  • 1-Bedroom: $1,749
  • 2-Bedroom: $2,057
  • 3+ bedrooms: $2,380

These are the maximum rates we’re using for this program. The rental rates are updated annually.

Yes. You need a building permit for all new ARUs or to legalize existing units. Your ARU must meet all applicable building and fire codes. A step by step guide is provided for developing an ARU.

Yes, if the ARU is still under construction and an occupancy permit has not yet been issued. However, only eligible costs incurred after receiving a letter of intent with conditional approval for the ARU incentive program from the city of Burlington will be eligible.

Contact our staff at buildingpermits@burlington.ca. We can help you figure out if your ARU complies with the Ontario building code, our zoning bylaws and other regulations. They can also check if building and occupancy permits were issued. If permits are missing, they can help you understand what you need to do to legalize your ARU.

No. Household appliances, land costs and non-ARU-related expenses are not eligible. Eligible expenses are outlined in the council approved affordable rental housing community improvement plan.

• Make sure you get your building permit by Oct.1, 2025.

• Complete the ARU including permitted occupancy within one year of your letter of intent

Funding is first-come, first-served and subject to availability so it’s a good idea to submit all applications as soon as you can. Your applications must be submitted, approved and building permit(s) issued before Oct. 1, 2025.  

Yes. City of Burlington Zoning allows you to build up to three ARUs in addition to your main home on your property. The program incentives are for each eligible ARU, up to three ARUs.

Yes. Family members can occupy the ARU. Just make sure the unit is legal and meets our affordability and occupancy conditions as outlined in your agreement with the City.

No. Short-term rentals, such as ‘Airbnb’, are not permitted. If you offer your ARU as a short-term rental property, this will breach your funding agreement.

If the ARU is no longer owned by you or you decide to use it for other purposes, you may have to repay your funding plus administrative fees 

Yes. This program can be combined with other incentive programs, such as:

• CMHC initiatives

• Halton Region programs

• Other City incentives such as our better homes Burlington program

• ARU incentive program: ARUProgram@Burlington.ca

• Community planning (zoning and ARU requirements): planning@burlington.ca

• Building services (permits and inspections): building@burlington.ca

• General inquiries: 905-335-7777