Intergenerational Home in Laval

Your parents are selling their house and want to move in with you. You picture a unit in the basement, a second kitchen, a door that locks. Before the first architect’s drawing, one thing has to be clear: this project is not authorized by a provincial statute, but by your city’s zoning by-law. Laval and Montreal do not say the same thing.

I am a broker, not a notary or a tax specialist: this is general information.

What the word “intergenerational” does not tell you

No counter issues an “intergenerational home permit”. What you are asking for is permission to add a dwelling to a building that has only one. The official vocabulary speaks of an accessory or additional dwelling unit, a logement additionnel.

The distinction is not cosmetic. An authorized logement additionnel is a real second dwelling: it shows up on the permit, it can receive its own civic address, and it enters the calculations of both your lender and the tax authorities.

Intergenerational home in Laval: what the by-law allows

Laval publishes a precise procedure for adding a logement additionnel inside a single-family house. Three points surprise families.

The permit is mandatory and the unit must stay attached. The City is explicit: creating an accessory dwelling unit entirely detached from the principal residence is not permitted on its territory. The work is authorized only inside an existing one-dwelling house. The recognized configurations are an extension, the conversion of an attached garage, and a finished basement of the bachelor type.

Access is flexible. The logement additionnel may be reachable directly from the main dwelling or through a shared hall, and the door connecting the two may be locked or not. A separate entrance may be built on any facade. Laval also specifies that adding a parking space is not required.

The family tie is not the condition everyone imagines. Among the advantages it lists, the City names rental income and the possibility for the owner to occupy the logement additionnel while renting out the main part of the house. In Laval, the municipal authorization therefore does not lock you into a use reserved for relatives. It is the lender and the tax rules that set the real limits.

Before drawing anything, check in the Info-règlements tool whether your address is subject to a site planning and architectural integration programme: if the mention appears, further requirements apply. The file stays heavy: a complete architect’s plan, a recent certificate of location from a land surveyor, a service connection form. In a flood zone, a basement dwelling could be prohibited. The other territory-wide checks are gathered in the Laval buying guide.

Intergenerational home in Montreal: the by-law belongs to the arrondissement

In Montreal there is no single answer. The zoning by-law is adopted by arrondissement, the borough, and two addresses separated by one street can fall under two different regimes.

Take one example. In Le Sud-Ouest, zoning by-law 01-280 classifies residential uses by number of dwellings: category H.1 covers single-dwelling buildings, category H.2 covers two-dwelling buildings. In a sector where only category H.1 is authorized, a second dwelling is not a permitted use. And article 151.1 of the same by-law prohibits creating a dwelling in a basement, except in two zones designated by name. The solution that is most common elsewhere is therefore closed by default in that borough.

The City confirms the general rule on its civic address number page: adding a single extra dwelling in a basement is possible in certain residential zones, and the rules must be validated at the permit counter. The civic address request is made at the same time as the permit application, and an inspector may verify the dwelling’s compliance on site.

One point I did not find, and I would rather say so: neither the Laval page nor the Montreal page I consulted requires removing the second kitchen when the parent leaves. That condition exists elsewhere in Quebec. Have it verified for your address before signing a promise to purchase.

The tax rule that decides for you

This is where families get caught, years later.

Change of use. Revenu Québec is clear: there is a changement d’usage, a change of use, if you convert, in whole or in part, a property you use as your principal residence into a property used to earn rental income, and a change of use occurs each time the percentage of use varies. At the moment of the change, you are deemed to have disposed of the converted portion for proceeds equal to its fair market value and to have reacquired it immediately after at the same price. This can produce a capital gain to report in the year of the change.

An election lets you defer that gain. It must have been made beforehand with the Canada Revenue Agency, under subsection 45(2) of the Income Tax Act, and it then applies automatically in Quebec. Since March 19, 2019, it can cover a partial change of use. It never relieves you of reporting the rental income.

Housing someone is not renting to them. Revenu Québec recognizes that you can rent out part of your residence without triggering a change of use, for example one or two rooms to boarders. A parent housed without rent generates no rental income at all. That distinction is the real dividing line of the whole project.

The designation goes on a form. To obtain the exemption, you must complete form TP-274 and check box 109 of Part A of Schedule G, then attach everything to the return for the year of the sale. Forgetting the TP-274 exposes you to a penalty of $100 per month, up to a maximum of $5,000. The Quebec designation is only possible if the same designation was first made with the Canada Revenue Agency.

Financing the additional unit: what CMHC requires

CMHC offers a refinancing product aimed precisely at creating an accessory dwelling. Its conditions look a great deal like an intergenerational setup.

• For an owner-occupied property, up to four dwellings including those that already exist, the loan can reach 90 % of value.
• The value of the property once the work is done must be under $2,000,000.
• Maximum amortization is 30 years.
• At least one dwelling must be occupied by the borrower, or by a person related to the borrower by marriage, common-law partnership or a legally recognized parent-child relationship, and this without rent.
• The accessory dwelling must be self-contained, compliant with the applicable by-laws, and cannot be used for short-term rental, meaning any period of fewer than 90 consecutive days.
• The insured financing must be approved before construction starts and must go to the work. No equity take-out is permitted.

Remember the fourth condition: CMHC accepts that the unit be occupied rent free by a close relative. Before calling a lender, run the cost of the work through the mortgage calculator.

The work: the RBQ licence also targets the owner

The Régie du bâtiment du Québec issues four categories of licence. The contractor licence is required of anyone who, for others, carries out or has carried out construction work. The owner-builder licence is mandatory for anyone who, on their own account, carries out or has carried out such work. Many families find this out too late. The verification works as explained in the guide on choosing a renovation contractor.

Title, the parent’s money, and what comes afterwards

The permit settles the building. It settles nothing between you.

Whose name is on title. If the parent puts in $150,000 and only the children are on title, the parent is not an owner. If the parent is on title with you, you are in undivided co-ownership. Éducaloi is blunt: without an agreement, the law presumes you own in equal shares, even if the down payments and the mortgage contributions were unequal, and the resale profit is split the same way. The full frame is covered in buying property together and indivision.

The paper trail of the money. A gift and a loan look alike in a bank account and are told apart in front of a notary. Without a dated written record, the amount disappears from the shared memory and reappears at the worst possible moment.

The notary is mandatory, not optional. The deed of sale, the published indivision agreement, the mortgage and the gift of an immovable all go through the notary. The order of signatures is described in the notary process.

Long-term care and death. If the parent has to move into care, the unit empties and the rental income question comes back. If the parent dies while on title, that share falls into the estate: you become co-owner with the heirs. A will, a right of first refusal and a life insurance policy large enough to buy out the share settle the essentials, before the work starts.

Frequently asked questions

Do I have to prove a family tie to get the permit in Laval? The City’s page on adding a logement additionnel does not require that proof and even names rental income among the advantages. Have your own address confirmed at the permit counter, since particular provisions may apply to your zone.

My basement is finished, I am only adding a kitchenette. Do I need a permit? Yes. What creates a dwelling is not the renovation, it is the addition of a dwelling unit. In Montreal, the civic address request is made with the permit application, and an inspector may come and verify compliance.

My parent pays me rent. Do I lose my principal residence exemption? Not necessarily in full, but you enter the changement d’usage regime, which is triggered each time the percentage of use varies. The calculation is done case by case with a tax specialist, and form TP-274 will have to follow at the sale.

Does a logement additionnel resell well? No official source lets me put a number on its effect on price. What I can say: the next buyer will inherit the same by-law and the same lender conditions, and a compliant unit, with the permit in the file, speaks to far more people than an improvised one.

To go further, read buying property together and indivision and common-law partners and the home in Quebec.

Looking for a property that could house your parents in Laval or Montreal? Write to me: we check the zoning of the address before the showing, not after the promise to purchase.

Georges Matar

Residential Real Estate Broker · RE/MAX DU CARTIER INC.

Contact Georges