Is a Toronto multiplex worth building? How to test the numbers

Key takeaways

• A multiplex is worth building when the finished value or rent covers land, building, charges, financing and your margin; test every lot on its own.
• CMHC's October 2025 survey put the average two-bedroom purpose-built rent in the Greater Toronto Area at $2,034 and the condominium two-bedroom rent at $2,904.
• Units first occupied after November 15, 2018 are exempt from Ontario's rent increase guideline.
• A building of four or more units, each with its own kitchen, bathroom and living area, can qualify for the 100% GST rental rebate; duplexes and triplexes cannot.
• Ontario and Toronto both charge land transfer tax on the lot, with brackets from 0.5% to 2.0% and higher rates on expensive houses.
• Test three outcomes: the design as drawn, a smaller approved design, and a later finish date.

What "worth it" means on this page

A multiplex is worth building when what it is worth at the end, sold or rented, covers everything it cost to get there and leaves a margin the builder is willing to accept for the risk. That answer is different on every lot, because land prices, lot shapes and approvals differ. No public source I trust publishes a profit figure for a typical Toronto fourplex, so this page leaves profit to your own numbers. It gives the lines of the test and the public facts that move each line, with their dates.

The unit count comes first, from the multiplex zoning guide or the Major Streets guide. The City charges are in the development charges guide. The developer hub shows where this test sits in the full process.

The lines of a simple pro forma

A pro forma is a table of every cost and every dollar of income, laid out over time. For a small Toronto multiplex, these are the lines, and the place each number should come from.

No public source can give you the construction and financing lines. Get them from people who will sign a contract for them.

Is a fourplex worth building in Toronto?

Some City rules have moved costs down for small multiplexes. The second to fourth unit on a parcel of up to six units pays no City development charge, and the fifth and sixth are reduced to zero dollars, under Municipal Code section 415-6 as amended on July 24, 2025. The same units pay no parkland cash-in-lieu. A duplex, triplex or fourplex has needed no parking since February 3, 2022, according to the City's Considerations When Building Multiplexes page. A small project of no more than 10 units is outside site plan control under the Planning Act.

Other rules hold the count down. Since June 26, 2025, a fourplex may hold at most 12 bedrooms. A lot that fails the depth test keeps a shorter building. A design that needs variances carries the cost and time of a Committee of Adjustment application, and the risk of a smaller approval. Put each of these into the test before you settle on a land price.

What rent can a new unit earn?

The public source for Toronto rents is CMHC's annual Rental Market Report, based on an October survey. The 2025 report, published December 11, 2025, gives these figures for the Greater Toronto Area.

Read these numbers with care. The purpose-built average covers buildings of every age, including older units with long-term tenants, so rents for new units can differ from it. CMHC says rented condominiums added competition for tenants in Toronto in 2025, and the condominium figure is also an average across the region. CMHC also reports that 75 percent of rental structures completed since 2022 offered at least one incentive to fill units, most often one to two months of free rent, and that the vacancy rate in projects built in the past three years was nearly 7 percent. A new multiplex will compete with those buildings for tenants. Build a lease-up period and some free rent into the first year.

For the rent you put in the pro forma, use current local listings and leases for units of the same size and finish near the lot, and keep CMHC's figures as the check on whether those numbers make sense.

Rent control and new units

Ontario's rent increase guideline limits how much most landlords can raise rent each year. The Province's page on residential rent increases, updated June 23, 2026, sets the 2027 guideline at 1.9 percent and says the guideline is capped at 2.5 percent. Under section 6.1 of the Residential Tenancies Act, the guideline does not apply to units in a building, or an addition, where no part was occupied for residential purposes on or before November 15, 2018. A newly built multiplex falls under that exemption. The Province says landlords can state the exemption in an additional term of the lease and should keep records that prove it.

The GST/HST rental rebate

The federal purpose-built rental housing rebate returns 100 percent of the GST, or the federal part of the HST, on certain new rental buildings. The Canada Revenue Agency's page, updated June 22, 2026, sets these conditions:

• The building has at least four units that each have a private kitchen, a private bathroom and a private living area, or at least ten residential units.
• At least 90 percent of the units are held for long-term rental.
• Construction began after September 13, 2023 and before 2031, and the building reaches substantial completion before 2036. The agency treats construction as starting when excavation begins.
• The units also qualify for the existing new residential rental property rebate.

The rebate does not apply to condominium units, single-unit housing, duplexes, triplexes, or the substantial renovation of an existing building. Ontario offers a provincial rebate of some or all of the provincial part of the HST on the same dates. For a builder, this is one reason a fourplex can test better than a triplex on the same lot. Ask your accountant how the rebate and the self-supply rules apply to your project before you count it.

Land transfer tax on the purchase

A builder buying a Toronto lot pays two land transfer taxes. Ontario's rates, on its page updated April 22, 2026, are 0.5 percent on the first $55,000, 1.0 percent to $250,000, 1.5 percent to $400,000 and 2.0 percent above $400,000, plus 2.5 percent above $2,000,000 where the land holds one or two single family residences. Toronto's municipal land transfer tax uses the same brackets. Since April 1, 2026, Toronto charges higher rates on land with one or two single family residences above $3,000,000: 4.40 percent to $4,000,000, rising to 8.60 percent above $20,000,000. A non-resident buyer of certain residential property also pays Toronto's 10 percent Municipal Non-Resident Speculation Tax, in force since January 1, 2025.

Rent or sell

The choice changes the cash flow. Non-rental development charges have been due in full before the occupancy permit since November 3, 2025, according to the City. Rental buildings pay in instalments, with the first at occupancy. The City's rate sheet has lower rates for purpose-built rental units, but Municipal Code section 415-7 A(2) says that if those units later get condominium approval or another approval that lets them be sold separately, the owner pays the difference plus interest. The rental rebate also depends on keeping 90 percent of the units rented. Choose a plan and test it as that plan.

Test three outcomes

I ask builders to run the numbers three ways before they buy. First, the design as drawn, approved without changes. Second, a smaller design: one fewer unit, fewer bedrooms, or a shorter building, as if a variance is refused or a tree fixes the footprint. Third, the design as drawn but finished later, with the extra months of interest and carrying costs. If the project works only in the first case, the land price leaves no room for risk. The severance and minor variance guide explains why approvals can change a design, and the site screening guide lists the site facts that can shrink it.

My numbers are a sales representative's check. Take the final numbers, the tax effects and the legal terms to your own accountant and lawyer, and confirm what the zoning allows with the City of Toronto.

How I check the numbers with a builder

I start from the unit count and bedroom mix the zoning allows on the lot. I list each unit with its City charges, add the land transfer tax at the offer price, and put the review and permit fees in their year. For income I use current local evidence, checked against CMHC's latest report. Then I run the three outcomes above and look at the land price each one can carry. Owners selling to builders see this math from the other side on the how builders price land page.

Questions to ask before you commit

• How many units and bedrooms does the zoning allow, and does the plan use them?
• Which units pay City charges, and at which rate?
• What rent or sale price does local evidence support for units of this size and finish?
• Does the building qualify for the rental rebate, and will you keep 90 percent of the units rented?
• How long is the timeline from purchase to occupancy, and what do the extra months cost?
• Does the project still work if the approved design is one unit smaller?

For what these buildings mean for a neighbourhood, read my post on Missing Middle Housing. If the smaller approved design is the one that gets built, does this lot still pay?

Frequently asked questions

Is a fourplex worth building in Toronto?

A fourplex is worth building in Toronto when its finished value or rent covers the land, the construction, the City charges and the financing with a margin you accept, and that answer differs for each lot. Public rules now lower some costs: since July 24, 2025, units 2 to 4 pay no City development charge, and since February 3, 2022, a fourplex needs no parking.

What rent does a two-bedroom apartment earn in the Greater Toronto Area?

A two-bedroom purpose-built rental apartment in the Greater Toronto Area rented for $2,034 a month on average in CMHC's October 2025 survey, up 3.5 percent, and a rented two-bedroom condominium averaged $2,904. CMHC published those figures in its Rental Market Report on December 11, 2025. They are averages across buildings of every age, so newer units need their own local evidence.

Are new Toronto rental units covered by rent control?

New Toronto rental units first occupied for residential purposes after November 15, 2018 are exempt from Ontario's rent increase guideline, under section 6.1 of the Residential Tenancies Act. The Province's rent increase page, updated June 23, 2026, sets the 2027 guideline at 1.9 percent for units it covers, and says the guideline is capped at 2.5 percent. The Province says landlords can note the exemption in the lease.

Can a fourplex get the GST/HST purpose-built rental rebate?

A fourplex can get the GST/HST purpose-built rental rebate if each of its four units has a private kitchen, a private bathroom and a private living area, and at least 90 percent of the units are held for long-term rental. The Canada Revenue Agency's page, updated June 22, 2026, says the rebate covers 100 percent of the GST and excludes duplexes, triplexes and condominium units.

When must construction start to get the purpose-built rental rebate?

Construction must start after September 13, 2023 and before 2031 to get the purpose-built rental rebate, and the building must reach what the agency calls substantial completion before 2036, according to the Canada Revenue Agency. The agency treats construction as starting when excavation for the building begins. Ontario offers a matching provincial rebate on the same dates.

How much land transfer tax does a builder pay on a Toronto lot?

A builder buying a Toronto lot pays Ontario land transfer tax and Toronto's municipal land transfer tax. Both charge 0.5 percent up to $55,000, 1.0 percent to $250,000, 1.5 percent to $400,000 and 2.0 percent above that. On land with one or two single family residences, both charge 2.5 percent above $2,000,000, and Toronto has charged 4.40 to 8.60 percent above $3,000,000 since April 1, 2026.

How do vacancy and incentives in new Toronto rentals affect a pro forma?

Vacancy and incentives in new Toronto rentals lower the first-year income in a pro forma. CMHC's 2025 Rental Market Report found a vacancy rate of nearly 7 percent in Greater Toronto Area projects built in the past three years, and said 75 percent of structures completed since 2022 offered at least one incentive, most often one to two months of free rent.

What happens if rental units in Toronto are later sold as condominiums?

If rental units in Toronto that paid development charges at the purpose-built rental rate later receive condominium approval or another approval that lets them be sold separately, the owner must pay the difference to the ownership rate. Municipal Code section 415-7 A(2) adds interest from the date the charge was first paid or payable. The rental rate only helps a builder who keeps the units rented.

What is Toronto's tax on foreign buyers of residential property?

Toronto's tax on foreign buyers of residential property is the Municipal Non-Resident Speculation Tax, at 10 percent of the purchase price, in force since January 1, 2025. The City's land transfer tax rates page says it applies to non-residents buying certain residential properties and is charged on top of the municipal land transfer tax. A buyer in that position should ask a lawyer before making an offer.

What does Anthony Palleschi check when he tests a multiplex's numbers?

Anthony Palleschi checks the unit count the zoning allows, the City charges on each unit, the land transfer tax, public rent data and the timeline, as a sales representative's check of the numbers. For rents he starts from CMHC's Rental Market Report of December 11, 2025. Buyers take final numbers, tax and legal terms to their own accountant and lawyer.

How much did turnover rents change in Toronto in 2025?

Turnover rents in the Greater Toronto Area fell in 2025: CMHC's Rental Market Report says the average rent on a new lease for a two-bedroom unit after a tenant left declined by 2.5 percent. The share of units that changed tenants rose from a record low of 6.4 percent to 8.5 percent, as lower rents led more renters to move.

Sources

1. 2025 Rental Market Report. Canada Mortgage and Housing Corporation. Published December 11, 2025. Accessed November 1, 2026.
2. Residential rent increases. Government of Ontario. Updated June 23, 2026. Accessed November 1, 2026.
3. Residential Tenancies Act, 2006, S.O. 2006, c. 17. Government of Ontario, e-Laws. Current version from September 21, 2026. Accessed November 1, 2026.
4. GST/HST purpose-built rental housing rebate (PBRH rebate). Canada Revenue Agency. Updated June 22, 2026. Accessed November 1, 2026.
5. Land transfer tax: calculating land transfer tax. Government of Ontario. Updated April 22, 2026. Accessed November 1, 2026.
6. Municipal Land Transfer Tax Rates and Fees. City of Toronto. Updated April 7, 2026. Accessed November 1, 2026.
7. Toronto Municipal Code Chapter 415, Development of Land. City of Toronto. Consolidated to July 30, 2026. Accessed November 1, 2026.
8. Considerations When Building Multiplexes. City of Toronto. Updated June 30, 2025. Accessed November 1, 2026.
9. Non-rental Residential Development Charges. City of Toronto. Updated November 14, 2025. Accessed November 1, 2026.

Planning and development potential is property-specific and subject to zoning, approvals, site conditions, municipal review and other due diligence. This guide gives general information. For legal, tax or financial advice, ask your own lawyer and accountant.