Toronto’s housing market is rapidly growing, and multiplex conversion Toronto 2025 are emerging as one of the smartest ways to increase rental income and property value. With new city bylaws allowing up to six units on many residential lots, turning a single-family home into a multi-unit income property has never been easier.
In this blog, you’ll learn what multiplex conversion is, why it’s a smart investment in Toronto today, and how to start your own project.
What Is a multiplex conversion Toronto 2025?
A multiplex conversion transforms a single-family home into a low-rise multi-unit dwelling — such as a duplex (2 units), triplex (3 units), fourplex (4 units), fiveplex (5 units), or sixplex (6 units).
These buildings, typically up to four storeys under Toronto’s 2025 zoning updates, allow tenants to rent more affordably than in high-rises, while homeowners can increase income from their newly created units.
Each unit needs independent entrances, kitchens, and bathrooms, maximizing rental potential and tenant privacy also before start ask your contractor what permits are required for multiplex housing in Toronto ?
Why Now Is the Best Time for Multiplex Conversions in Toronto EHON Initiative Simplifies Approvals
Toronto’s Expanding Housing Options in Neighbourhoods (EHON) policy, updated in August 2025, allows up to six units “as-of-right” in many low-rise residential zones (RD, RS, RT), eliminating the need for rezoning. This simplifies approvals and cuts costs, making multiplex conversions more accessible than ever.
Growing Population & Housing Demand
Toronto’s population is projected to grow by 700,000 people by 2051. Rental vacancy rates remain tight, with a city average of 2.2% and hotspots like North York even lower at 1.6%. Well-located rentals are in high demand, making multiplex conversions an attractive investment.
Strong Rental Income & ROI
- Average rents range from $2,000 to $3,500 per unit per month, depending on the neighborhood (check with local realtors before starting).
- Multiplex conversions typically offer cap rates of 6–8%, with potential ROI of 120–160% over 5 years after renovation costs and appreciation.
- Waived development charges (DCs) save investors $200,000 to $270,000 per project, with government incentives encouraging homeowners to invest in rental properties.
Financing Support with CMHC MLI Select
The Canada Mortgage and Housing Corporation (CMHC) offers the MLI Select program, providing up to 95% loan-to-value financing and forgivable grants up to $85,000 per unit for energy-efficient designs. This lowers upfront costs and improves cash flow.
Note: Not everyone qualifies for MLI Select. Other financing options may be more suitable for your project, and we can help you evaluate your best path.
Investment Snapshot: Multiplex Conversion in Toronto (2025)
| Metric | Data/Estimate | Source |
|---|---|---|
| Property Purchase Price | $1.5 million | Market Average |
| Conversion Cost | $100,000 – $500,000 | Renovation Estimates |
| Annual Rental Revenue | $120,000+ (4 units x $2,500/month) | CMHC / Rentals.ca |
| Cap Rate | 6% – 8% | Elevate Realty |
| Development Charge Savings | $200,000 – $270,000 (waived under EHON) | City of Toronto / Bill 185 |
| Vacancy Rate (Citywide) | 2.2% | CMHC 2024 Rental Market |
| Vacancy Rate (North York) | 1.6% | CMHC 2024 Rental Market |
| Population Growth | +700,000 by 2051 | Toronto Official Plan |
| Permits Issued (2025) | 311 multiplex permits | City of Toronto |
ROI Comparison by Toronto Neighborhood (2025)
| Neighborhood | Avg Rent/Unit | Vacancy Rate | Cap Rate | 5-Year Projected ROI |
|---|---|---|---|---|
| North York | $2,600 | 1.8% | 5% | 120% |
| Scarborough | $2,200 | 2.0% | 5.5% | 140% |
| East York | $2,500 | 2.2% | 4.5% | 110% |
| Downtown Toronto | $2,900 | 2.8% | 4% | 100% |
| Etobicoke | $2,300 | 2.3% | 5% | 125% |
Note: ROI assumes $1.5M purchase, $200K upgrades, avg rent/unit $2,300, 5% cap rate, 3% annual appreciation.
How Does a Multiplex Conversion Work? Step-by-Step
- Assess Feasibility
Use Toronto’s Zoning By-law Interactive Map to check your lot size and zoning. Minimum lot width is usually 25 ft and depth 100 ft for multiplex conversions. We can connect you with experienced architects to guide you through the process. - Calculate ROI
Estimate renovation costs ($100K–$500K depending on unit count and scope), rental income (approx $2,500/unit), and savings from waived development charges. Use tools like HouseSigma for property value estimates. Always get quotes from reputable contractors. - Design & Permitting
Hire an OAA-licensed architect for major renovations and structural changes, or a BCIN designer for smaller projects. Submit building permits and apply for any needed variances. - Secure Financing
Apply for CMHC’s MLI Select program or explore private lender options. Always compare options to find the best financing for your project. - Construction & Inspection
Build units with fire separation, soundproofing, separate utilities, and egress windows per Ontario Building Code. Complete final city inspections to certify legal rental units.
Realistic Scenario: Mark & Sara’s East York Multiplex Conversion
Mark and Sara own a 2,500 sq. ft. detached home with a large basement. They convert it into 4 rental units: basement 1-bedroom, main floor 2-bedroom, second floor 2-bedroom, and a studio loft.
- Purchase price: $1.3M
- Renovation cost: $450,000
- Post-conversion value: $1.9M
- Total monthly rent: $9,200
- Estimated ROI: 15%+ cash-on-cash annually with CMHC financing
Their project benefits from EHON’s waived development charges and streamlined permit process, saving approximately $250,000 and cutting the timeline by several months.
Common Pitfalls and How to Avoid Them
| Pitfall | Risk/Cost | Mitigation |
|---|---|---|
| High upfront costs | $100K–$500K renovation | Budget 20% contingency, use CMHC loan |
| Heritage restrictions | Design delays, permit refusals | Check Toronto Heritage Register early |
| Non-compliance fines | $50,000+ fines | Use BCIN architects, follow OBC |
| Rent declines | 3.5–5.6% annual decreases | Target low-vacancy areas like Scarborough |
FAQ: Your multiplex conversion Toronto 2025 Questions Answered
Q: Do I need an architect or BCIN designer?
A: Major structural and multi-unit projects require an OAA-licensed architect. Smaller non-structural renovations may be done with BCIN designers, but multiplexes usually need architectural drawings for permits. Buildings over three stories require OAA architects.
Q: How many units can I add?
A: Up to six units as-of-right in many Toronto residential zones under EHON. Typical multiplexes are up to four units inside the main building plus garden or laneway suites. Confirm with your city for the latest updates.
Q: Can I get CMHC MLI Select financing?
A: Yes, if your project meets energy-efficiency and accessibility requirements. It offers up to 95% LTV financing and forgivable grants of up to $85,000 per unit. Always confirm with CMHC and compare other financing options.
Multiplex conversion success stories: Renotec Fourplex Transformation in Toronto
Renotec converted a dated bungalow in Scarborough into a sleek fourplex by adding a two-storey top-up, preserving neighborhood character while increasing density.
- Total investment: $480,000
- New rental income: $11,000/month
- Annual ROI: 17%
- Project timeline: 10 months, with no rezoning delays due to EHON
This project demonstrates how smart design paired with new bylaws can generate strong returns while helping address Toronto’s housing shortage.
Ready to Start Your multiplex conversion Toronto 2025 Journey?
Toronto multiplex housing investment opportunities are an incredible opportunity for Toronto homeowners and investors to generate rental income, increase property value, and contribute to much-needed housing supply.
Contact Renotec today for a free feasibility study and see how your property can become a legal multiplex cash-flow powerhouse!
- Toronto Official Plan: toronto.ca/official-plan
- CMHC Rental Market Reports: cmhc-schl.gc.ca
- City of Toronto Permits Data: toronto.ca/building-construction
- Bill 185 Documentation: ontario.ca/laws/statute/24c18
- Elevate Realty ROI Data: elevatepartners.ca/resources