The Changing Landscape of Secondary Suites in B.C.
The recent cancellation of B.C.’s Secondary Suite Incentive Program (SSIP) marks a significant shift in the housing landscape for Vancouver Island homeowners. As of March 30, 2025, this program—which has provided substantial financial assistance for creating rental units—will no longer accept new applications. But what does this mean for Vancouver Island property owners considering adding a secondary suite? Let’s explore the opportunities and challenges.
What Was the Secondary Suite Incentive Program?
For the past two years, qualified homeowners could receive a forgivable loan covering 50% of construction costs for a new suite, up to $40,000. To qualify, homeowners needed:
- A combined gross annual income under $209,420
- Property with a BC Assessment value below $2.15 million (2024 threshold)
- To live in the property as their primary residence
- To rent the suite at below-market rates for at least 5 years
The program aimed to create approximately 3,000 new rental units at below-market rates across the province, making it an attractive option for Vancouver Island homeowners looking to maximize their property’s potential.
The Pros of Secondary Suites on Vancouver Island
Despite the program’s cancellation, secondary suites continue to offer numerous benefits for Vancouver Island homeowners:
Additional Income Stream
A secondary suite provides a reliable monthly income source, helping offset mortgage payments and other property expenses.
Increased Property Value
Homes with legal secondary suites typically command higher market values, making them attractive investment properties.
Supporting Housing Affordability
In Vancouver Island’s tight rental market, secondary suites provide much-needed housing options at typically more affordable rates than purpose-built rentals.
Multi-generational Living Options
Secondary suites offer flexible living arrangements for family members, from aging parents to adult children, while maintaining privacy and independence.
Low Vacancy Advantage
With Vancouver Island’s consistently low vacancy rates, finding tenants is rarely a challenge for well-maintained secondary suites.
The Cons and Challenges
While secondary suites offer numerous benefits, there are several considerations for Vancouver Island homeowners:
Loss of Provincial Incentives
With the SSIP ending, the financial burden of creating a secondary suite falls entirely on homeowners until the federal Canada Secondary Suite Loan Program launches.
Construction Costs
Building costs on Vancouver Island remain high, making the initial investment substantial without government assistance.
Regulatory Requirements
Local municipalities on Vancouver Island have varying regulations for secondary suites, including size restrictions, parking requirements, and building code compliance.
Landlord Responsibilities
Becoming a landlord means taking on new responsibilities, from maintenance to understanding the Residential Tenancy Act.
Potential Impact on Insurance and Property Taxes
Adding a secondary suite may affect your home insurance premiums and property tax assessments.
What’s Next for Vancouver Island Homeowners?
Although the provincial program is ending, homeowners interested in building secondary suites still have options:
Federal Program on the Horizon
The upcoming Canada Secondary Suite Loan Program will offer low-interest loans up to $80,000 for secondary suite construction.
Municipal Incentives
Some Vancouver Island municipalities offer their own incentives for creating secondary suites, such as reduced permit fees or expedited approvals.
Increasing Demand
With housing shortages continuing across Vancouver Island, secondary suites remain in high demand, potentially offering strong returns on investment.
The Shanon Kelley Realty Group Perspective
“Secondary suites continue to be a valuable addition to Vancouver Island properties,” says Shanon Kelley. “While the provincial incentive program ending is disappointing, the underlying benefits of adding a rental unit to your property remain strong in our market.”
As Vancouver Island real estate specialists, we’ve helped numerous clients navigate the process of purchasing homes with suite potential or adding suites to existing properties. Recent data shows that western Canada, including Vancouver Island, has a higher rate of secondary suite rentals (13% of homeowners) compared to eastern Canada (8%), demonstrating our region’s embrace of this housing solution.
Looking to Explore Your Options?
If you’re considering adding a secondary suite to your Vancouver Island property or purchasing a home with suite potential, the Shanon Kelley Realty Group can help you understand the local market conditions, regulations, and opportunities.
Contact us today to discuss how secondary suites might fit into your real estate strategy on Vancouver Island.
Are you interested in properties with secondary suite potential on Vancouver Island? Contact the Shanon Kelley Realty Group for expert guidance on finding the right investment property.
