Converting a basement into a second unit is not just a good way to bring in revenue through renting, it's also eligible for a 2009 home renovation tax rebate. (Matthew Alleyne/Toronto Observer)
With the increased need for affordable housing in Scarborough, and a larger enrolment at U of T Scarborough, many families and students are looking for a “clean and quiet” place to call home, says Ryan Loy of Scarborough.
Homeowners looking for a way to bring in some extra income could stand to benefit from this, by using their basement as a rental property.
“With many apartments the rent is too high, and you have to worry about pests, whether it is clean and the noise level,” said Loy.
“I know a lot of people who feel more comfortable in basement apartments because it feels more like a home, and frankly it is a lot cheaper than most other places.”
Toronto homeowners must follow certain procedures when creating a basement unit in their homes. Besides the general work permit that can be obtained at the Scarborough Civic Centre, homeowners must ensure the unit has separate tenant parking, outside entrance, bathroom and kitchen, and a fire barrier between the basement and the upper level.
“The various requirements of the city are not there to make it difficult for homeowners to create a second dwelling, but for the safety of the tenants and the landlord,” says Theo Lawrence, of the City of Toronto.
The government is offering an incentive for homeowners to spruce up their homes for themselves and possible tenants: a 15 per cent tax rebate for home renovations.
The Home Renovation Tax Credit (HRTC) is applicable on services and goods between $1,000 and $10,000 spent between January 27, 2009 and February 1, 2010.
According to the Canadian Revenue Agency (CRA), the work can be done on a home, cottage or condominium unit. It can range from kitchen renovations and new bathrooms to renovating and finishing a basement.
“The cost of renovating a basement can vary depending on several factors,” says Tom Kentros of ATK General Construction Ltd. “It can range from $5,000 to $50,000 depending on what needs to be done.”
The 15 per cent means a maximum of $1,350 cash back, but shopping around can reveal retailers and contractors offering incentives for your business. For example, Home Depot is offering up to a $1,000 in gift cards to customers looking to take advantage of the HRTC.