It depends almost entirely on type. Converting an existing basement is the cheapest route, a garage conversion sits in the middle, and a new detached garden or laneway house is the most expensive — often by a multiple, not a margin. Asking “what does an ADU cost?” is like asking what a vehicle costs.
- Type drives cost more than anything else — basement conversion vs detached build is a multiple
- The three universal swing factors: ceiling height, servicing distance, foundation conditions
- No credible national dollar range exists — we explain why and give the ordering instead
- Ontario waives DCs on the 2nd and 3rd units; Alberta has no PST or per-unit DCs; BC charges 7% PST
- Free plans exist — Toronto’s pre-approved sets and CMHC’s Housing Design Catalogue
This is the hub for the cost cluster. Rather than give one number that would be wrong for almost everyone, it sets out how the types compare and what moves the figure within each — then points you to the type-specific guides.
Cost by ADU type
On dollar figures, we’ll be direct: we could not source a defensible Canadian range for any of these, so we’re not publishing one. The numbers circulating online come from individual builders describing one market, from American data, or from articles citing other articles. A garden suite in Vancouver and a basement conversion in an Alberta satellite are not comparable projects.
What is reliable and transferable is the ordering, and the reasons behind it:
| ADU type | Relative cost | Why |
|---|---|---|
| Basement suite conversion | Lowest | Structure, foundation and services already exist. Work is fit-out plus code compliance |
| Interior conversion (upper floor, side wing) | Low–mid | Same logic; may need a new entrance |
| Garage conversion | Mid — but see below | Walls and roof exist; the slab usually doesn’t survive |
| Garden suite (new detached, no lane) | High | Complete new building, own foundation, services trenched across the lot |
| Laneway house (new detached, off a lane) | Highest per m² | As above, plus narrow lane access and small-project fixed costs |
The garage conversion caveat is the one that catches people. It looks like the cheap option because the structure exists. But a garage slab is typically shallow, unheated and not built to carry a heated, occupied building through frost cycles — so it usually has to be replaced. Once you’re replacing the foundation, you’re paying new-build foundation costs within an inherited, awkward footprint. Price a new build alongside it before committing.
Type-specific detail: our guides on garden suite cost, laneway house cost, basement apartment cost and fourplex cost.
What drives cost within each type
Three factors do most of the work, whatever you’re building.
1. Ceiling height — for anything below grade. The minimum is 1.95 m in Alberta and Ontario basements (1.85 m below beams and ducts) and 2 m in British Columbia. If you clear it, a basement conversion is the cheapest ADU there is. If you don’t, underpinning is structural work that can cost more than the rent will ever justify.
Measure this before anything else. It is the single highest-value hour in the whole process, and it determines which cost category you’re in.
2. Servicing distance — for anything detached. Water, sanitary sewer and electrical have to reach the rear of the lot. Where they don’t already, trenching the depth of the property — and reinstating whatever was on top — is frequently the largest single line item. It’s also highly site-specific, which is why two neighbouring lots quote very differently.
3. Foundation and soil — for anything new. Poor soil, a high water table or significant grade change adds cost before framing starts.
Secondary drivers, in rough order:
- Site access. A narrow side yard (garden suite) or a narrow lane (laneway house) limits equipment and adds labour hours.
- Egress retrofits below grade — cutting concrete, building a window well with at least 760 mm of clearance.
- Fire and sound separation between units.
- Electrical capacity. A second kitchen commonly triggers a service upgrade.
- Trees. A protected tree can move a building, shrink it or rule it out.
- Finish level — real, but the smallest, and the one owners over-weight. Rental markets price light, size and independence over fittings.
Regional differences
The same building genuinely costs differently by province, for reasons unrelated to construction.
Ontario. Development charges per residential unit are among the highest in Canada — but Bill 23 waives them on the second and third units, along with parkland dedication. That exemption frequently exceeds every other saving available. Toronto additionally defers charges on rear-yard suites, collecting only if a new lot is created within 20 years, and Council expects DC reductions of 40–60% between 2026 and 2029.
Alberta. No provincial sales tax, and no Ontario-style per-unit development charges on infill. Permit fees are modest and published — Calgary lists $403.52 for a new secondary suite building permit and $205.92 to legalise an existing one, with the suite registry free. This is the lowest base cost of the three provinces, and it’s structural rather than a programme.
British Columbia. 7% PST on many construction inputs — a real cost Alberta doesn’t have, and one not relieved by the federal GST rental rebate. Development cost charges apply unless your municipality exempts secondary suites, which many do. Some municipalities also charge ongoing fees: in Surrey, a registered suite attracts secondary suite utility and service fees on annual property taxes.
The net picture: Alberta lowest, Ontario high but with the largest exemption, BC carrying both DCCs and PST.
Soft costs
Consistently underestimated, and proportionally largest on small detached builds:
- Design and drawings — usually the biggest soft cost
- Survey, for anything in the rear yard
- Structural engineering, particularly for two storeys or underpinning
- Arborist report, routine in mature Toronto and Vancouver neighbourhoods
- Grading and drainage plans
- Permits and trade permits — modest, and published by your municipality
Two free resources that reduce these:
- Toronto’s “Made in Toronto” pre-approved plans for garden and laneway suites, intended to make building an additional unit faster and less expensive
- CMHC’s Housing Design Catalogue, a free national resource including laneway and garden suite designs
Check both before commissioning custom drawings.
And a contingency line. A budget without one isn’t a budget — small projects encounter surprises, and on a detached build the surprises are usually underground.
What it returns
Cost only means something against return, and there are two separate returns that get conflated.
Rental income — cash flow while you hold. Get your market’s figure from CMHC’s Rental Market Report, then adjust: downward for a below-grade unit, upward for a detached one, and downward again for vacancy — which rose across major Canadian centres through 2025 and into 2026 — plus maintenance, insurance and tax on the income.
Value uplift — what the property is worth when you sell. A legal unit adds value through recognised income and a wider buyer pool; an unpermitted one adds much less and can reduce value. That gap is where most of the value sits, and it’s the strongest practical argument for permitting properly.
One thing that caps the upside on detached units: you generally can’t sell them separately. Vancouver policy states laneway houses cannot be strata-titled or sold separately from the main house; Edmonton’s bylaw prohibits subdividing backyard housing; Toronto laneway suites aren’t normally severable. The return rests on rent and floor area.
Our guides on whether an ADU is worth it and whether an ADU adds value cover both returns in detail.
How to budget properly
Six steps, in order. The first three cost nothing.
- Measure ceiling height, if you’re considering a basement. This alone sorts you into a cost category.
- Locate your services and measure the distance to the rear yard.
- Check zoning, setbacks and trees — draw the lot, apply the rules, see what’s buildable.
- Look at the free plan sets before paying for custom design.
- Get two or three quotes from builders who have built your ADU type specifically, on the same drawings and the same scope.
- Insist on a breakdown — construction, servicing, soft costs and contingency separately. A lump sum hides where the risk is.
And be willing to conclude no. Some basements shouldn’t be converted and some rear yards shouldn’t be built on. Reaching that conclusion for a few hundred dollars of assessment is a good outcome, not a wasted one. Our your options page covers the alternatives.
Get a real number for your property
The three factors that decide your cost — ceiling height, servicing distance and foundation conditions — are all specific to your address, and all establishable before you commission a drawing.
HouseLyft’s free property assessment works through them and tells you which ADU types are realistic on your lot. Our financing page covers how projects get funded. Request your free report.
This guide explains construction cost drivers in general terms and is not a cost estimate or financial advice. No figure here is a quotation — obtain quotes from qualified builders and confirm municipal fees with your own municipality before budgeting.
Checked by Lee Yousaf, Founder