How do the two compare?
| Question | Basement apartment (internal ADU) | Garden suite (detached ADU) |
|---|---|---|
| Where | Inside the existing house | Rear or interior side yard only |
| Distance from lot lines | The house's own | 1.2 m |
| Distance from the house | Not applicable | 4.0 m behind the rear wall |
| Height | The house's own | 6.0 m at most, no balcony above the first floor |
| Size | Within the house | The lesser of 75 m² and the floor area of the house |
| Entrance | One front entrance on the house; no outside stair above the first floor | A 1.0 m path to the street with 2.1 m clearance |
| Parking | Up to two spaces may be in the front yard | Under the same by-law |
| City permit fee | $515 flat | $1,030 flat |
| Builder licence for a new home | No: a renovation | Generally yes, from the HCRA |
Zoning rules from Zoning By-law 05-200 section 4.33, as rewritten by By-law 22-132 (City of Hamilton By-law 22-132, read November 5, 2026) and amended by By-law 25-033 in 2025 (the 4.0 m distance). Permit fees from the City's fee schedule (City of Hamilton, Building Permit Fees, read November 5, 2026). A lot under a former town's by-law follows that by-law's own section, listed on the areas page.
When does a basement apartment make more sense?
When the basement already has the height and a way to make a second exit, and the yard is small. It needs no new foundation, and its permit is the lower flat fee. The work is a renovation: framing, the fire separation, plumbing, a separate heating and ventilation layout, and the electrical work, which needs its own ESA notification as who files the electrical permit explains. An apartment already there is covered in making a basement apartment legal.
When does a garden suite make more sense?
When the yard has the room and the basement does not have the height. An existing legal accessory building that stood on May 12, 2021 may also be converted, which can be the cheaper route. A garden suite is a new home in the eyes of Ontario's regulator: the HCRA says coach, laneway and tiny homes generally require licensing and warranty coverage
(Home Construction Regulatory Authority, read November 5, 2026), explained in who may build a new home. Test a design against the by-law in the garden suite fit checker, and see how it is serviced in water, sewer and access for a garden suite.
Can I have both?
Often yes: the City reviews up to two internal units and one detached unit on an existing single family dwelling. Can my house have an ADU? goes through the checks.