A legal basement apartment is built with permits, inspections and meets all applicable building, fire, and zoning requirements, including proper ceiling heights, safe exits, fire separation, and approved electrical and plumbing work.

An illegal basement apartment is one that was built without permits or does not meet current requirements. These units can create safety concerns and may lead to issues with insurance, resale, or enforcement. In many cases, a single complaint from a neighbour can trigger an inspection, potentially affecting the ability to continue renting the unit.

No reputable contractors will agree to build illegal basement apartments. If a contractor is willing to bypass permits or by-law requirements, it often indicates they may cut corners elsewhere in the project as well.

At Burcon Renovations, we specialize in building fully legal basement apartments and secondary suites, and we manage the process from start to finish.

The City of London allows Additional Residential Units (ARUs) in many properties — but approval is not automatic.

The City reviews:

• Zoning permissions

• Fire separation and safety

• Ceiling heights

• Exits and egress windows

• Mechanical, plumbing, and electrical systems

• Parking and property standards
  

A building permit is required, and inspections occur throughout the project.

We walk you through:

• What’s required

• What’s optional

• What makes financial sense for your situation

While every property is different, legal basement apartments generally pay back in multiple ways:

1. Monthly Rental Income

In London, a properly finished legal suite often commands:

$1,200–$1,700+ per month (1‑bedroom), depending on finishes and neighbourhood.

That’s roughly $14,000–$20,000+ per year before expenses — strong cash flow compared to other renovations.

2. Increased Resale Value

Homes with legal suites attract:

• Investors seeking rental income

• Multigenerational buyers

• Buyers planning ahead

Legal basement apartments add functional, compliant living space, not just cosmetic upgrades — and appraisers often recognize this when valuing properties.

3. Lower Regulatory Risk

Building a legal suite protects you from:

• Insurance denial for unpermitted units

• Enforcement orders or fines

• Resale headaches
  

A legal suite is an investment you can actually use and sell without surprise setbacks.

London, Ontario & Canada

Many homeowners and investors assume a basement apartment conversion is out of reach financially. The reality is — there is real financial support available, and when structured properly, these programs can significantly reduce upfront costs.

At Burcon Renovations, we don’t just build basement apartments — we help our clients understand and access the funding options available to them.

Below are the most relevant and realistic programs available in London, Ontario and across Canada.

City of London – Additional Residential Unit (ARU) Funding

The City of London actively supports basement apartments as a solution to housing affordability. Through its Affordable Housing programs, the City offers financial assistance specifically for creating secondary suites.

What’s Available:

• Up to $45,000 in financial assistance

• Offered as a low-interest or forgivable loan

• Designed specifically for secondary suites, including basement apartments

• Typically applies to owner-occupied homes
  

Why This Matters:

This funding can be used toward:

• construction costs

• fire and sound separation upgrades

• egress windows

• life-safety and code compliance requirements
  

For many homeowners, this program alone can cover a large portion of the upfront cost.

Burcon Renovations can help you determine:
✔ if your property qualifies
✔ how the funding applies to your project
✔ what design and permitting steps are required

Federal Government – Secondary Suite Loan Program

The Government of Canada has introduced a national loan program specifically for homeowners building secondary suites, including basement apartments.

What’s Available:

• Up to $80,000 in financing

• Low fixed interest rate (around 2%)

• Long repayment term (up to 15 years)

• Intended for legal secondary suites

  
  

Why This Matters:

This program is designed to make it easier for homeowners to:

• build rental units without high-interest borrowing

• avoid maxing out personal lines of credit

• spread renovation costs over time

For many clients, this means you don’t need all the cash upfront to get started.

Mortgage Refinancing & Home Equity Options (Federal Changes)

Recent federal mortgage changes now make it easier to use your home’s value to fund a basement apartment.

What’s Changed:

• Homeowners can refinance up to 90% of the home’s value after renovations

• The added value of a legal basement apartment counts

• Rental income potential can help with lender approval
  

Why This Matters:

Instead of paying out-of-pocket, many homeowners:

• refinance once construction is complete

• roll renovation costs into their mortgage

• offset payments with future rental income

This approach often results in lower monthly costs than expected.

What Most Clients Don’t Realize

Many of our clients are surprised to learn that:

• funding programs can be combined

• financing can be structured before construction begins

• rental income changes what lenders are willing to approve

• a basement apartment often pays for itself over time
  

When done properly, the project becomes an investment, not just a renovation.

The cost of a basement apartment conversion can vary widely depending on the existing basement, the level of finishing, and the work required to meet building and fire code requirements.

In London, Ontario, most full legal basement apartment projects typically fall within a broad range of $70,000-$125,000+. This cost is largely offset do to local incentive programs, passive income potential and increased re-sale value.

What Influences the Cost

Several factors affect where your project lands within, or beyond this range:

• Size of the basement and layout changes

• Level of finishes and cabinetry/appliance quality

• Adding or relocating bathrooms and kitchens

• Separate entrance / walkout construction

• Permits, architectural drawings, and inspections

• Necessary upgrades to electrical, HVAC, or plumbing systems

• Current condition of basement

For smaller basement spaces with fewer structural changes, costs may be a bit lower, while larger suites or premium finishes can push the budget higher.

Why the Range is Broad

Every basement is different. Some older homes need extra work for egress windows or fire separation, while others already have open layouts that make design and construction smoother.

That’s why a consultation, site visit and detailed quote are the best way to understand the cost for your specific home.

At Burcon Renovations, we take the time to assess your unique space and explain how each element, from layout to code compliance, impacts the overall pricing.

We can also walk you through available financing and incentive programs and explain how they may apply to your project.

We understand that funding and paperwork can feel overwhelming. That’s why we help our clients by:

✔ reviewing which programs apply to their situation
✔ designing suites that meet funding and code requirements
✔ coordinating timelines so financing aligns with construction
✔ connecting clients with the right professionals when needed

You don’t need to figure this out alone — we guide you through the entire process.

If you’re worried about:

• upfront cost

• affordability

• whether a basement apartment is realistic for you
  

The answer is often yes — with the right plan and the right team.

Our approach follows the city of London requirements and Ontario building codes. 

That means we look at:

• Zoning eligibility

• Minimum ceiling heights

• Fire separation & soundproofing

• Egress windows & exits

• HVAC, plumbing, and electrical systems

• Parking and property standards

• Permit strategy before construction begins

We walk you through:

• What’s required

• What’s optional

• What makes financial sense for your situation

This upfront planning prevents costly redesigns and helps ensure the suite is built right the first time.