Apply for funding to build a secondary or backyard suite on your property: Secondary and Backyard Suite Incentive Program
The Secondary and Backyard Suite Incentive Program helps homeowners create affordable housing on their property. Homeowners can apply for a loan to build a secondary or backyard suite on the property of their primary residence. The suite is for family members or to provide affordable housing for non-family members. You can apply anytime.
Use the Secondary and Backyard Suite Incentive Program Application Form to apply for a loan to help build a secondary or backyard suite on the property of your primary residence.
You need to use the funding to build a secondary or backyard suite for family members or to provide affordable housing for non-family members. A basement apartment and an apartment detached from your primary residence are examples of a secondary suite.
Affordable housing is housing where the rent is below the average market rent (AMR) for the location.
Funding is available for up to 50% of eligible project costs, to a maximum of $25,000. The applicant needs to fund the remaining balance of the project.
The funding provides a forgivable loan. Terms of up to 5 years are available. Funding for more than 1 secondary or backyard suite may be available if allowed by the municipality.
Eligible projects need to provide secondary or backyard suites that:
- meet all municipal requirements
- are on the property of the homeowner’s primary residence
A primary residence must be a single-family home that meets health and safety standards. It also needs to have enough space to accommodate a secondary or backyard suite.
If your home doesn’t meet health and safety standards, you can apply for help through other housing programs for additional assistance.
Eligible costs include:
- labour, including fair labour costs from family members who don’t or won’t live on the property and who work in the construction or renovation industry (fair labour costs need to be similar to costs for skilled trades)
- purchase and placement of a prefabricated backyard suite on the property
- related taxes and legal expenses
- other costs related to applying for and building a secondary or backyard suite (like building permits)
Ineligible costs include:
- costs from before the project is approved
- costs to bring the family home or an existing secondary or backyard suite up to minimum health and safety standards or to meet municipal building codes
- prorated costs for creating or upgrading common areas (like a laundry room or backyard space) that are not related to the secondary or backyard suite
- labour by the homeowner, occupant of the home or immediate family members that will live in the secondary or backyard suite
When the suite is occupied, there needs to be a residential lease agreement between the homeowner (landlord) and the tenant. Once the lease agreement is signed, both the tenant and landlord have rights and responsibilities under the Residential Tenancies Act and regulations.
You need to have a year-to-year or month-to-month lease while there’s still a loan on the suite. Fixed-term leases and short-term rentals (28 days in a row or less) are not allowed while there’s still a loan on the suite.
When renting the suite to a tenant who isn’t a member of your immediate family, the rent needs to be at least 20% below average market rent for the location.
Your tenant needs to be a resident of Nova Scotia.
Accessing the funding
Once a project is approved, the program provides an Offer of Finance that outlines the conditions of the loan. The Secondary and Backyard Suite Incentive Program provides 100% of the funding after the work is completed and you get your occupancy permit from the municipality.
You can apply for the loan if you:
- live in your own single-family home on the property where you plan to build the suite
- will continue to live in the home after your build the suite
- are a Canadian citizen or have permanent resident status and live in Nova Scotia (you need to live in Nova Scotia for at least 183 days each year)
- have paid your municipal residential property taxes in full
- offer rent that’s at least 20% below average market rent for the location
- have equity or are approved for debt financing to cover the total cost of the project less the loan amount
You also need to meet 1 of the following requirements:
- tenant is your parent and is 65 or older
- tenant is your adult child and you’re 65 or older
- tenant isn’t a family member and has an annual household income equal to or below the household income limits for the program
If you received a loan through the Down Payment Assistance Program, you can apply to the Secondary and Backyard Suite Incentive Program after you own and live in your home for 1 year (12 months in a row). You also need to meet all other eligibility criteria for the Secondary and Backyard Suite Incentive Program.
How to apply
- Review detailed program criteria in the Secondary and Backyard Suite Incentive Program Guide.
- Complete the application form.
- Check the application for details on all required supporting documents.
- Complete the Required Documents checklist.
- Send your completed application and supporting documents by mail. Or visit a regional housing office.
How long it takes
It should take 3 to 4 weeks for the Secondary and Backyard Suite Incentive Program to review your application and let you know if your loan is approved. It can take longer if more information is needed or if your application doesn’t include all the required information.
There is no cost to apply for the funding, but you need show that you have equity or have been approved for debt financing to cover the total cost of the project less the loan amount.
Before you start
Make sure you:
- review program criteria and household income limits in the Secondary and Backyard Suite Incentive Program Guide
- review the Secondary and Backyard Suite Incentive Program Required Documents Checklist