Free Multiplexes from Big Condo Ownership Rules

Special thank you to Ben Singer for his expertise and insights on this memo.

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Summary

For decades, Toronto’s housing rules made it nearly impossible to build anything between a detached house and an apartment tower. That’s now changing—multiplexes are finally legal—but the rules for how they can be owned and sold haven’t caught up. A family can build a fourplex, but can’t easily sell one of the homes inside it. Owners of older triplexes face costly red tape if they want to convert their units to ownership. The result is that most new multiplexes are held as rentals, leaving few ways for families or small investors to share in their growth.

Toronto can fix this with simple, targeted reforms. Exempting small buildings from the condominium process, allowing rental-to-ownership conversions as-of-right, and modernizing outdated requirements would make multiplexes easier to build, finance, and buy. These changes wouldn’t alter the city’s character; they would simply open more doors for ownership, helping families and small builders add the kind of homes Toronto needs most.

Bold Goal: Implement multiplex ownership reforms by the end of 2026 so that every small multi-unit building in Toronto can be built, sold, or converted as easily as a condominium.

Background & Motivation

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For more than half a century, Toronto’s zoning system made it nearly impossible to build anything between a detached house and an apartment building. Multiplexes—duplexes, triplexes, and small walk-ups—were effectively banned across most neighbourhoods, and only in recent years has the city moved to legalize fourplexes and sixplexes¹. As a result, much of the city’s existing stock of small multi-unit housing is already decades old, built long before today’s rules. These homes continue to provide affordable and flexible options, yet the pathways to renew, sell, or replicate them remain narrow.

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Those pathways are constrained by layers of outdated regulation. A builder who wants to sell units in a new fourplex must still complete a full condominium application—the same process used for a 200-unit tower—circulated among departments, reviewed under subdivision criteria, and subject to thousands of dollars in fees. Owners of older multiplexes who wish to convert them to ownership face additional hurdles: city policies meant to preserve rental stock require special permissions even when tenants are already protected by provincial law. To register a building, architects and engineers must sign certificates designed to certify proper construction², a cumbersome requirement for homes built decades ago. Each of these steps adds friction, cost, and uncertainty to what should be a straightforward process.

The result is that while multiplexes are now permitted, they are difficult to sell to the end user. A builder can sell an entire four or six-unit building to an investor, but not individual homes within it unless they complete the condominium application process. That restriction sharply limits liquidity through additional costs and delays to the process. It discourages builders who might otherwise construct multiplexes for ownership, and it hinders investors from partially divesting their holdings or allowing tenants to buy the units they live in. Large developments and condo towers have clear, established channels for ownership exchange, but small buildings do not. This unique structural barrier pushes new multiplex projects toward rental-only models, narrowing pathways into ownership and reducing the very diversity of tenure that the city’s zoning reforms were meant to encourage.

The problem extends beyond developers. Many “mom and pop” investors, owners of duplexes or triplexes who might wish to add units, rebuild, or subdivide their properties, face the same procedural obstacles. They encounter the same condominium rules, the same conversion restrictions, and the same costs as professional developers, despite operating at a fraction of the scale and with limited financing. For them, these requirements are not just a nuisance but a full deterrent to reinvestment. These are precisely the homeowners who could deliver the city’s most incremental and community-compatible density, but they are frozen out by systems designed for high-rise builders.

Other jurisdictions have already recognized and corrected this gap. In British Columbia, the province’s new Small-Scale Multi-Unit Housing reforms have not only legalized multiplexes on single-family lots but also enabled strata (condo) ownership for up to six units³, ensuring that each home can be individually financed, sold, and occupied. That approach treats small buildings as housing, not as subdivisions, and gives both builders and buyers the confidence to participate in the market. Ontario and Toronto could adopt a similarly pragmatic approach: exempting small buildings from full condominium applications, allowing conversions as-of-right, and removing redundant professional declarations for older properties. These are modest, targeted changes—well within both municipal and provincial authority—that would make the difference between a policy that exists on paper and one that delivers new homes in practice.

Toronto’s challenge now is to match its new zoning permissions with modern rules for ownership and exchange. By simplifying how small buildings are registered, converted, and financed, the city can make these homes as easy to buy and sell as any condominium. Doing so would restore a form of housing that once defined Toronto’s neighbourhoods, giving families, small builders, and individual homeowners the confidence to invest again in the city’s missing middle.

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Real-World Solutions

British Columbia – Enabling Ownership for Small Multiplexes

British Columbia’s 2023–24 Small-Scale Multi-Unit Housing (SSMUH)⁴ reforms legalized up to six units on most residential lots province-wide and, critically, allowed them to be registered as strata (condo) ownership. This pairing of zoning reform with ownership flexibility means small projects can now be financed, sold, or lived in by multiple families rather than held as single rental assets. Builders report faster uptake because buyers can purchase individual units, giving them a path into ownership without leaving established neighbourhoods.

Netherlands – Small-Scale Ownership with Shared Infrastructure

Dutch municipalities allow small multi-unit buildings to be organized through “apartment rights”—a legal framework that separates ownership of individual dwellings while maintaining collective management of shared elements⁵. The system is simple, low-cost, and used extensively for three- to eight-unit buildings in older urban areas.

Oregon – Fee-Simple Splits for Middle Housing

Oregon’s 2021 “Middle Housing Land Division” law (SB 458⁶) lets small multiplexes and cottage clusters divide lots into individually owned parcels without a full subdivision or condo process. Cities like Portland and Eugene treat each unit as its own lot, with shared-services agreements for driveways and utilities. The result is a streamlined path for builders to sell individual homes within a single infill project while keeping compliance straightforward.

Seattle – Simplifying Small-Unit Ownership

Seattle’s reforms to its “Backyard Cottages” and “Rowhouse” zoning categories⁷ introduced a streamlined condominium registration process for small projects under ten units. The city provides a pre-approved legal template for shared-services agreements, cutting registration costs by more than half. Combined with state-level adjustments to Washington’s condo warranty laws, these changes revived small ownership construction after a decade-long stall.

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What Must Be Done

Exempt Small Multi-Unit Buildings from the Condominium Application Process

Toronto should treat multiplexes and other small-scale buildings as housing, not as subdivisions. The current requirement to submit a full draft plan of condominium adds unnecessary time, cost, and uncertainty for projects with only a few homes. Exempting buildings of ten units or fewer would align the process with the province’s recent site-plan exemptions and remove one of the biggest deterrents to ownership-based construction.

• Amend the Condominium Act, S.O. 1998, c. 19 to exempt residential buildings with ten or fewer units from the condominium draft plan process. In the interim, the City can commit to a streamlined, administrative approval pathway for small-scale condominium applications, ensuring they are processed quickly and predictably until provincial exemptions are in place.
• Authorize, through regulation under the Condominium Act, S.O. 1998, c. 19, municipalities to sign condominium plans where an as-built survey matches approved building permits.
• Amend the Toronto Municipal Code, Chapter 441 (Fees and Charges) to establish a small-scale condominium registration fee category capped at the survey filing fee.
• Direct Toronto City Planning to establish administrative procedures for surveyor-based registration of small condominium plans once provincial exemptions are in place.

Permit Rental-to-Ownership Conversions as-of-Right

Rules meant to preserve Toronto’s rental stock have unintentionally blocked flexibility for small buildings. Allowing these conversions as-of-right would give owners and tenants more options—especially in older multiplexes with large, family-sized units that tenants might wish to purchase. Tenant protections under provincial law already ensure security of tenure and right of first refusal, making the current municipal control redundant.

• Delete the requirement for rental-to-condominium conversion permits for buildings containing ten or fewer units by amending Toronto Municipal Code Chapter 667 (Residential Apartment Commercial Conversion and Demolition Control).
• Maintain all tenant protections under the Provincial Residential Tenancies Act, 2006, S.O. 2006, c. 17, including security of tenure and right of first refusal on conversion.
• Direct Toronto City Planning and Housing Secretariat staff to report annually on the number and outcomes of small-scale conversions under the amended Chapter 667.

Remove Redundant Professional Certifications for Older Multiplexes

Owners of older multi-unit buildings often cannot obtain the professional certifications required for condominium registration, since records or original designers no longer exist. Eliminating these declarations for older, small buildings would simplify registration without compromising safety. Municipal work-order checks and ongoing reserve-fund studies already provide adequate oversight.

• Amend the regulations under the Provincial Condominium Act, 1998, S.O. 1998, c. 19 to remove the Schedule G architect/engineer declaration for buildings older than seven years and containing ten or fewer units.
• Replace the Schedule G requirement with a municipal work-order search confirming that no outstanding structural, safety, or property standards violations exist, implemented through the Toronto Municipal Code.
• Require all registered condominiums, regardless of age, to maintain reserve-fund studies every three years under the authority of the Condominium Act, 1998.

Align Federal and Provincial HST Rebates Across Tenures

Current tax policy favours large-scale rental development over small ownership projects by offering full HST rebates for purpose-built rentals but only partial rebates for ownership housing. Equalizing these rebates would allow builders to make tenure decisions based on demand rather than tax bias, and would encourage more small-scale ownership supply.

• Extend the full federal and Ontario HST new-rental rebates to new ownership construction by amending the Excise Tax Act, R.S.C. 1985, c. E-15 and the corresponding Ontario HST rebate regulations made under the Comprehensive Integrated Tax Coordination Agreement.
• Equalize the federal and Ontario HST rebate programs across rental and ownership tenures through coordinated amendments to the Excise Tax Act and Ontario’s HST rebate regulations.
• Jointly review implementation through Finance Canada and the Ontario Ministry of Finance to ensure alignment with municipal housing goals.

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Common Questions

Isn’t this just deregulation for developers?
No. These reforms are about making small, family-scale housing possible again—not about large developers. The beneficiaries are homeowners, small builders, and local investors who want to create or own multiplexes, not towers. Simplifying these rules simply gives them the same tools larger projects already have.

Wouldn’t this reduce rental supply?
No. Tenants in converted buildings already have protections under Ontario’s Residential Tenancies Act - the right to remain regardless of the owner’s intention and the right of first refusal if their unit is sold. Allowing ownership flexibility doesn’t remove rental homes—it just lets some become owned units over time, improving mobility and choice.

Won’t this make housing more expensive?
Quite the opposite. When builders and homeowners can sell individual units, they free up capital to build more. Liquidity makes small projects financially viable, which increases supply and creates new, attainable ownership options for families who would otherwise be priced out of single homes or large condos.

Isn’t this too complex to administer?
It’s actually simpler than the current approach. The proposed exemptions mirror recent provincial site-plan reforms, replacing discretionary reviews with straightforward survey checks and compliance sign-offs. Other provinces and cities already do this with minimal administrative burden.

Will safety or building standards be compromised?
No. All construction would still require building permits, inspections, and compliance with the Ontario Building Code. The proposal only removes redundant procedural steps—it doesn’t touch health, safety, or accessibility requirements.

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Conclusion

Toronto has taken an important step by legalizing fourplexes and sixplexes, but zoning reform alone won’t build new homes. The next challenge is to make those homes ownable—to give builders, families, and small investors the ability to create and exchange housing at a human scale. Today, outdated condominium rules, conversion permits, and certification requirements make that almost impossible, freezing out exactly the kind of incremental, neighbourhood-friendly housing the city needs most.

By exempting small buildings from the condominium process, allowing ownership conversions as-of-right, and aligning tax policy across tenures, Toronto can unlock a new wave of family-scale investment. These reforms would not change the look of the city, only its accessibility: who gets to build, who gets to buy, and who gets to stay. The city’s multiplex legalization opened the door—modernizing ownership is how we finally walk through it.

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Thank you to Hongyu and Jeho for their help in editing this memo.