What the City of St. John’s allows

Under the City’s Development Regulations, an apartment inside a house is a subsidiary dwelling unit: a separate unit that’s smaller than, and secondary to, the main home. A house with a basement apartment is legally a single detached dwelling with a subsidiary unit, not a duplex.

The City widened the rules in 2024 and 2025 to add housing:

  • Up to two subsidiary units in a single detached house, as long as each is smaller than the main unit.
  • One subsidiary unit in a semi-detached house or townhouse.
  • None in a duplex, triplex or four-plex.
  • Backyard suites (a small separate home behind the house) are now allowed on many residential lots, one per lot, with limits on size, height and setbacks.

Subsidiary units are a permitted use in most residential zones. Each extra unit generally needs one more parking space, with some exceptions downtown. Check the zone of the specific lot, or ask the City’s planning office at planning@stjohns.ca.

Mount Pearl, Paradise and CBS have their own rules. Paradise and CBS, for example, allow an apartment in a single or semi-detached house, smaller than the main unit and with an extra parking space.

Permits, inspections and safety

Creating an apartment, or changing how a building is used, needs a building permit, plus separate electrical and plumbing permits. The City inspects at set stages and issues an occupancy certificate before anyone can live in the unit.

The City’s Residential Property Standards By-Law, updated in December 2025, applies to all rental housing. It requires:

  • Smoke alarms on every storey and in every bedroom, tested at least once a year.
  • Carbon monoxide alarms near bedrooms where there’s a fuel-burning appliance.
  • Fire separation between units, as the building code requires.
  • A separate way out for each unit that doesn’t pass through the other unit.
  • A separate electrical panel for each unit.
  • Heat of at least 20°C in living areas.

Owners can’t rent out a unit that doesn’t meet it.

How to check an apartment was approved

Listings often say “registered two-apartment home,” but it’s worth confirming:

  1. Ask the seller for the permits and occupancy certificate for the apartment.
  2. Check the tax bill. In St. John’s the water tax is charged per unit, and the bill shows how many water units are billed.
  3. Have your home inspector look at the apartment specifically: alarms, the exit, fire separation and the electrical panel.

Build these into your conditions so there’s time to get answers. If an apartment was never approved, bringing it up to code can be expensive, and it can affect your insurance and how a lender treats the rent.

How the rent counts for a mortgage

This is where a two-unit home can really help. CMHC’s rules for insured mortgages on an owner-occupied two-unit home:

  • Rent counts. Lenders can count up to 100% of the apartment’s gross rent toward qualifying.
  • Down payment is the same as a single-family home: 5% on the first $500,000 and 10% on the rest, for homes under $1.5 million.
  • Stress test: you still qualify at the higher of your rate plus 2% or 5.25%.

If you won’t live in the home, it’s an investment property: expect at least 20% down, and usually only part of the rent counts. Lenders differ in what they need to see (a lease, an appraiser’s rent estimate, proof the unit is legal), so talk to your mortgage professional early. Our rental property calculator can help you run the numbers.

Renting out the apartment

Tenancies in Newfoundland and Labrador fall under the Residential Tenancies Act, 2018.

  • Security deposit: at most three-quarters of one month’s rent for a monthly tenancy. It has to be held in trust and returned within 10 days after the tenancy ends unless you file a claim.
  • Rent increases: once every 12 months, not in the first year, with at least six months’ written notice for a monthly tenancy. There’s no cap on the amount.
  • Ending a monthly tenancy without cause: the landlord must give at least three months’ notice, and the tenant at least one month.
  • Disputes go to Residential Tenancies, part of Digital Government and Service NL.

Where to find the rules and forms

  • The Act itself: the full Residential Tenancies Act, 2018 is free to read on the House of Assembly website.
  • Plain-language help: the province’s Landlord and Tenant pages explain the rules for both landlords and tenants, and how to contact Residential Tenancies.
  • Standard forms: the province’s Applications and Forms page has free forms for landlords, including the Standard Rental Agreement, the Rental Premises Condition Report, the Landlord’s Notice to Increase Rent, notices to end a tenancy and to enter the unit, and the Application for Dispute Resolution.

When you rent the unit, the Act says you must give the tenant a copy of the Act and its regulations, and a copy of the signed rental agreement within 10 days. If the agreement isn’t in writing, you must give the tenant a written notice with the required details within 10 days. Until you do, the tenant doesn’t have to pay rent. Doing a condition report with the tenant at move-in also makes it easier to settle the security deposit when they leave.

Renting by the night or week instead? Every short-term rental in the province, including a basement suite, must be registered with the Department of Tourism, Culture, Arts and Recreation.

Tax and insurance

  • Rental income is reported on your tax return (CRA Form T776). Costs for the apartment alone are deductible, and shared costs like property tax, insurance and heat are split by a reasonable measure, such as floor area.
  • When you sell, the principal residence exemption may not cover the apartment. A self-contained unit usually counts as a separate rental part, so the gain on that share can be taxable. Talk to an accountant, especially before claiming depreciation on the building.
  • Insurance: the Financial Consumer Agency of Canada says you must tell your insurer if you rent out part of your home. The Insurance Bureau of Canada warns that a policy can be voided if you don’t. Your policy won’t cover your tenant’s belongings, so ask tenants to carry their own insurance.

A quick checklist before you buy

  1. Ask for the permits and occupancy certificate.
  2. Check the water units on the tax bill.
  3. Have the inspector check alarms, exits, fire separation and the panel.
  4. Get the current lease, rent and deposit details if there’s a tenant.
  5. Talk to your lender about how the rent will count.
  6. Call your insurer before your conditions come off.