• Last Updated:
  • May 19th, 2018 11:13 pm
[OP]
Jr. Member
May 12, 2003
137 posts
38 upvotes
GTA

Basement Permit

Hi guys, planning to finish my basement with a side entrance as a rental unit

was doing some research and seeing that I can finish my basement + side entrance without making it a legal seperate apartment?

Thoughts? Experience?
13 replies
Newbie
Jul 13, 2016
65 posts
37 upvotes
One loophole - if you never finish the ceiling, MPAC doesn't consider it "finished" so that square footage won't be added to your home assessment. You can find nice ways to cover up the ceiling without actually finishing it.
Deal Addict
Apr 18, 2013
1534 posts
464 upvotes
Canada
soupmaster666 wrote:
May 18th, 2018 11:36 am
One loophole - if you never finish the ceiling, MPAC doesn't consider it "finished" so that square footage won't be added to your home assessment. You can find nice ways to cover up the ceiling without actually finishing it.
This is true, or don't complete one electrical wall socket/plug, which also means it's not "finished". However, here in Winnipeg, finished basements are never included in the listed square footage of a home.
Deal Fanatic
User avatar
Mar 23, 2008
5900 posts
3162 upvotes
Edmonton
gbill2004 wrote:
May 18th, 2018 11:48 am
This is true, or don't complete one electrical wall socket/plug, which also means it's not "finished". However, here in Winnipeg, finished basements are never included in the listed square footage of a home.
Just because something isn't included in the "listed square footage" doesn't mean it can't increase your assessed property value...

C
Deal Addict
Apr 18, 2013
1534 posts
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CNeufeld wrote:
May 18th, 2018 12:02 pm
Just because something isn't included in the "listed square footage" doesn't mean it can't increase your assessed property value...

C
I agree.
Jr. Member
User avatar
Jul 18, 2007
121 posts
15 upvotes
London
In london, if you can get from your downstairs unit to your upstairs unit without stepping outside, it is then a single family dwelling. As long as your mailing addresses go to this house to prove that it's your principal residence you don't need a permit or rental licence.
Jr. Member
Mar 3, 2018
192 posts
135 upvotes
GTA
I assume you have considered the income tax implications of a separate entrance structural change to create a rental unit. Meaning that part of your property would now be subject to capital gains tax if a separate entrance is created. Whereas if no separate entrance it would be considered part of your principal residence and exempt.
[OP]
Jr. Member
May 12, 2003
137 posts
38 upvotes
GTA
LOL....first of all that is not true at ALL. Having a rental unit does not necessarily create capital gains taxes.

My concern isn't more on capital gains tax, its more on property tax increases.
DaveTheDude wrote:
May 18th, 2018 11:08 pm
I assume you have considered the income tax implications of a separate entrance structural change to create a rental unit. Meaning that part of your property would now be subject to capital gains tax if a separate entrance is created. Whereas if no separate entrance it would be considered part of your principal residence and exempt.
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Jun 26, 2009
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DaveTheDude wrote: I assume you have considered the income tax implications of a separate entrance structural change to create a rental unit. Meaning that part of your property would now be subject to capital gains tax if a separate entrance is created. Whereas if no separate entrance it would be considered part of your principal residence and exempt.
How would they even know, if you don't claim it? You can always say it's your brother living downstairs for free. As long as there is other way to access that apartment from inside you are fine. There are thousands of houses with separate /side entrance and I never heard about income tax implications. Property tax is a different story.
[OP]
Jr. Member
May 12, 2003
137 posts
38 upvotes
GTA
What if I have 99% of the basement finished, with cieling...and keep part of it unfinished?
soupmaster666 wrote:
May 18th, 2018 11:36 am
One loophole - if you never finish the ceiling, MPAC doesn't consider it "finished" so that square footage won't be added to your home assessment. You can find nice ways to cover up the ceiling without actually finishing it.
Jr. Member
Mar 3, 2018
192 posts
135 upvotes
GTA
ssj4_ootaku1 wrote:
May 19th, 2018 1:40 pm
LOL....first of all that is not true at ALL. Having a rental unit does not necessarily create capital gains taxes.

My concern isn't more on capital gains tax, its more on property tax increases.
Laughing here as “you don’t know what you don’t know”.
A structual change that creates a rental property makes it subject to capital gains tax. You can choose to evade the issue risking the new CRA $8K penalty for failure to report. But before you laugh it off do a quick google search. I would post references but you seem not to care.
[OP]
Jr. Member
May 12, 2003
137 posts
38 upvotes
GTA
Yes, i'm going to laugh it off. Trust me, i know WAYYYY more than you on this. Tax is my profession, I do this for a living.

Again, it doesn't NECESSARILY make the house subject to capital gains tax. You have to claim CCA on the property for it to be fall under cap tax. If you do not claim CCA, there is no cap tax as long as the other part of the property is your principal residence and you can file a simple for to exclude capital gains.

Please don't google information, read the actual income tax act book, which gives you all of this information.

Stop giving out incorrect information.
DaveTheDude wrote:
May 19th, 2018 2:14 pm
Laughing here as “you don’t know what you don’t know”.
A structual change that creates a rental property makes it subject to capital gains tax. You can choose to evade the issue risking the new CRA $8K penalty for failure to report. But before you laugh it off do a quick google search. I would post references but you seem not to care.
Jr. Member
Mar 3, 2018
192 posts
135 upvotes
GTA
ssj4_ootaku1 wrote:
May 19th, 2018 2:28 pm
Yes, i'm going to laugh it off. Trust me, i know WAYYYY more than you on this. Tax is my profession, I do this for a living.

Again, it doesn't NECESSARILY make the house subject to capital gains tax. You have to claim CCA on the property for it to be fall under cap tax. If you do not claim CCA, there is no cap tax as long as the other part of the property is your principal residence and you can file a simple for to exclude capital gains.

Please don't google information, read the actual income tax act book, which gives you all of this information.

Stop giving out incorrect information.
It is disappointing to hear you are a tax professional. I would have expected more from a fellow CPA. Obviously you are not up to date on the new reporting requirements for principal residence change of use. The no CCA requirement is only applicable if there is no structural change.
Don’t bother responding as I blocked you and will never see it.
Deal Addict
Jan 25, 2007
3880 posts
1210 upvotes
Paris
ssj4_ootaku1 wrote:
May 19th, 2018 1:47 pm
What if I have 99% of the basement finished, with cieling...and keep part of it unfinished?
How would that effect anything? If they came in to assess and they saw a finished basement, do you think saying “no no, it’s not finished! I didn’t do this one plug!” Would change your home value in any way? Plus, you need a permit for pretty much everything and you need to close those permits for a legal apartment.

Also, people have this misconception about MPAC that they look at the number of bathrooms, or street frontage, or or or. It’s a straight value of your home multiplied by the active tax rate. So if your house has 170 linear feet of street and your neighbour has 55’ but your house is a dump, your value is less and your neighbour pays more tax.

Plus, for the most part, what you do means nothing. It’s all about what the neighbourhood as a collective does and what homes sell for. So everyone finishes their basement your 1% unfinished is meaningless.
Gbill2004: Thanks but I'll just smell the couch before/if I buy it.

jonnyb: I go in there like PICASSO and toss the glue everywhere, I don't care what house I'm on.

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