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London ARU guide

Will Building an ARU Increase My Property Taxes in London?

An ARU can improve income and property utility, but it can also change assessment value. London homeowners should treat property tax as part of the ROI model, alongside capped rent, financing, insurance, maintenance, licensing, and utilities.

Run The ARU Audit
Decision guide

Check the property before you spend on plans

Use the lot, loan, rent-cap, and servicing screens to decide whether the next step should be design work, a builder conversation, or more research.

  • Check the address
  • Review the loan rules
  • Confirm the rent math
  • Budget the hidden costs

Reassessment Realities

Adding a legal second unit can increase the assessed value of a property because the home now has additional permitted living area and income potential. MPAC reassessment should be expected as a planning risk, especially when the project includes new construction, a garage conversion, or a substantial interior suite.

  • Plan for assessment changes after permits and improvements are completed.
  • Watch for supplementary or omitted assessment notices after the work is recorded.
  • Keep project records so the improvement scope is clear if questions arise.

Factoring Taxes Into ROI

If you are using a CMHC rent cap such as $1,371/month as a planning value, do not compare it only against the construction loan payment. Deduct a realistic allowance for property tax increases, insurance, vacancy, repairs, utilities, licensing, and maintenance. The rent cap calculator and cost guide are better companions than a simple gross-rent estimate.

Gross rent is the headline. Net revenue is the decision.

FAQ

Common questions, answered plainly

Will an ARU definitely increase my property taxes?

A legal ARU can increase assessed value, so homeowners should budget for a possible tax increase. The exact impact depends on MPAC assessment and municipal tax treatment.

Should property tax be included in ARU ROI calculations?

Yes. Property tax, insurance, vacancy, repairs, utilities, licensing, and financing costs should all be deducted before relying on projected net income.

Check The Net-ROI Picture

Use the audit tool to start with feasibility, then model income after taxes and ownership costs.

Run The ARU Audit

Next checks

01 London ARU Zoning Rules Check zoning, setbacks, lot coverage, and detached ARU placement rules. 02 ARU Loan Funding Paths Compare London's ARU loan, grant, rent-cap, timing, and cash-flow screens. 03 CMHC Rent Cap Calculator Model the 1-bedroom and 2-bedroom rent caps before relying on the loan. 04 Cost To Build A Detached ARU Review construction, servicing, permit, insurance, tax, and development charge risks. 05 ARU Contractor Checklist Prepare for contractor quotes with zoning, servicing, cost, permit, and loan questions. 06 CMHC ARU Plan Guide Compare catalogue plans before choosing a design direction. 07 London ARU Grant Guide Review the forgivable-loan screens before you spend on drawings. 08 Granny Suite Planning Plan a family backyard suite while checking ARU rules, permits, and funding limits.