Stratify Your Plex | Rental Then Strata
Rent Now, Stratify Later?
You can rent a new BC plex first and stratify it later, but the strata plan then needs city approval as a conversion of an occupied building. If you built under BC Housing's rental exemption, a covenant on title also bars the sale of any unit for 10 years. So the choice between rental and strata titles belongs before the first tenant moves in. This page sets out what each path costs you in approvals, GST and time, city by city, and what our sources leave unanswered.
The short answer
- 01A building counts as "previously occupied" once anyone has lived in it, at any time and for any purpose (Strata Property Regulation s.14.1). Rent one unit before the strata plan is filed, and the plan later needs city approval as a conversion under section 242 of the Strata Property Act.
- 02If you stratify first, while the building is empty, you can still rent every unit. The strata plan is already filed, so no conversion is needed.
- 03A building built under BC Housing's rental exemption carries a covenant on title that bars the sale of any unit for 10 years from first occupancy. We found no published way to release it early.
- 04Renting new units you built triggers the GST self-supply rule when the first unit is leased or occupied. The 100% purpose-built rental rebate can offset it if you meet its conditions.
- 05Cities add their own rules for converting rented buildings. Burnaby does not permit strata conversion of existing purpose-built rental housing, except duplex and semi-detached units. Surrey, Richmond, Coquitlam, City of North Vancouver, Victoria, Saanich, Kelowna, Abbotsford, Nanaimo, Maple Ridge tie conversions of rented units to a vacancy rate.
- 06Two tax questions stay open in our sources: how GST applies to a later strata sale after self-supply, and whether the home flipping tax count starts again for each new strata lot.
The decision point: before the first person moves in
The Strata Property Act has two paths to a strata plan, and occupancy decides which one you take. A tenant, a family member or you yourself moving in all count. A strata plan already filed stays filed, so renting after the plan is deposited does not create a conversion.
| Path | What the strata plan needs | What follows |
|---|---|---|
| Stratify first, then rent | A BC land surveyor certifies on Form S that nobody has lived in the building, dated no more than 180 days before the plan is filed (s.241). No city approval under the Act. | Each strata lot can be rented. You can sell lots later, subject to home warranty (or the rental covenant, if you used the exemption). |
| Rent first, stratify later | The plan needs approval from the city council or its delegate under s.242, on Form T dated no more than 180 days before filing. The decision is final, with no appeal. | The city may approve, approve with conditions, or refuse. Tenant rules, vacancy rules and building upgrades come from the city. |
Stratifying first and keeping every lot is a real option. You hold all the strata lots, rent them out, and the strata corporation exists from the day the plan is deposited. Until the first lot is sold, you as the owner developer pay every strata expense (Act s.7). Nanaimo's small-scale housing FAQ says stratification there must happen at the time of construction, before the units are occupied, with all units stratified at the same time unless a phased strata is approved. The before move-in page walks through the Form S timing.
The rental exemption covenant
A new home normally needs a licensed builder and home warranty insurance, and it cannot be sold within 10 years of its first occupancy permit without that cover or an exemption (Homeowner Protection Act s.22). The rental exemption is the way to skip licensing, warranty and the related fees for a rental building. It covers three cases: a multi-unit rental building on one title, a strata where one owner holds every unit, and 3 or more rental units on one title (Homeowner Protection Act Regulation s.2(2)).
The exemption comes with a covenant registered on title. It restricts the sale or other disposition of any dwelling unit for 10 years from the date of first occupancy (s.2(2.1)). BC Housing's page adds that the covenant requires the building to be used only for rental, and that rental units in a mixed-use building must be in a separate air space parcel.
Neither source gives a way to end the covenant early. Whether BC Housing would release it, for example if warranty insurance is bought later, is not confirmed. If you might sell any unit within 10 years, build with a licensed builder and warranty insurance from the start.
GST: self-supply and the rental rebates
Renting new units you built is a taxable event for GST even though you sold nothing. These rules come from the Canada Revenue Agency (CRA) page on the new residential rental property rebate, modified September 2, 2026.
| Rule | What it says |
|---|---|
| Self-supply | A builder who rents out new units it built must account for GST on their fair market value when the first unit is leased or occupied. |
| Enhanced purpose-built rental rebate (100%) | At least 4 units, each with its own kitchen, bathroom and living area (or 10 or more units); at least 90% of units held for long-term rental; construction started after September 13, 2023 and before 2031, and substantially complete before 2036. |
| New residential rental property rebate (36%) | The landlord rebate, for a unit with a fair market value under $450,000. |
| GST on a later strata sale | Not confirmed. Our sources do not say whether stratifying after the self-supply rule applied changes the GST on a later sale of the strata units. Ask a tax accountant before you plan on selling. |
Both the 90% long-term rental condition and the rental exemption covenant assume the building stays rental. The GST rebate guide covers each rebate in detail.
Rented first: the section 242 conversion
Once a building has been occupied, the strata plan needs approval from the "approving authority": the municipal council, or the regional board outside a municipality (s.242). Council can hand the decision to an approving officer for a set type of building (s.242(10)). The authority may approve, approve with conditions, or refuse, and its decision is final with no appeal.
It must refuse unless the building substantially complies with local bylaws and the building regulations (s.242(5)). It must consider the priority of rental housing over owned housing in the area, any proposal to relocate the people living there, the building's life expectancy, projected increases in major maintenance costs, and anything else it finds relevant (s.242(6)). Approval is endorsed on Form T, dated no more than 180 days before the plan is filed.
The Act itself sets no tenant notice or consent rule. Those steps come from each city's policy. The strata conversion page covers the full process and the building report.
Each city's rules for converting a rented building
From each city's own policy, guide or bylaw, read on October 29, 2026. "Not confirmed" means we could not find the rule in the city's documents.
| City | Conversions | Tenant rules | Vacancy rule |
|---|---|---|---|
| Vancouver | Accepted. The City may refuse a building that does not meet zoning, and may refuse 3 or more units in C-2, RM-2 to RM-6, FM-1 or CD-1 zones where rental replacement rules apply. | At least two thirds of the households in the building must consent in writing. Each occupant gets written notice, the proposed sale prices, example fees and the building report, and the City mails every household a Tenant Response Form. | Not confirmed. |
| Burnaby | Duplex and semi-detached buildings can be converted. Conversion of existing purpose-built rental housing is not permitted (Council's 1974 Rental Conversion Control Policy). | Reviewed by Council case by case. In the 2022 duplex example, approval came with a Building Department inspection and a section 219 covenant that each unit is used as a single-family dwelling only. | Not confirmed. |
| Surrey | Accepted for owned buildings. Under Council Policy M-10, Council will not approve conversions from rental to strata units unless Surrey's vacancy rate is 4% or more as measured by CMHC. | In the 2014 duplex example, the owner notified the tenants. | Rental to strata only when the CMHC vacancy rate for Surrey is 4% or higher (Policy M-10). |
| Richmond | Accepted. A duplex must prove it is used as a two-family dwelling only. For 3 or more units, if the rental vacancy rate is under 2% and a dozen or more units are affected, Council should consider refusing. | The owner's written tenant relocation plan (refused if undue hardship would result) and the tenants' written views, using the City's Tenant Impact Survey. | Council should consider refusing when vacancy is under 2% and a dozen or more units are affected (Policy 5012). |
| Coquitlam | Accepted. For 3 or more rental units, conversion is not favoured when the Tri-Cities or Metro vacancy rate is under 4.0%, and at least 60% of tenants must be in favour. | For 2 units, written evidence that current tenants favour the conversion. For 3 or more rental units, at least 60% of tenants in favour. | 3 or more rental units: not favoured under 4.0% vacancy. |
| City of North Vancouver | Accepted. Rental apartments of 3 or more units cannot convert unless the CMHC vacancy rate is at least 4% for 12 months in a row. | A tenant relocation statement is required. | 3 or more rental units: 4% vacancy for 12 consecutive months. |
| New Westminster | Accepted for some buildings. The City's 1978 Moratorium on Strata Conversions policy prohibits stratifying existing non-stratified multiple-unit rental buildings, and the Secured Market Rental Housing Policy (revised January 9, 2017) says the City has long denied strata conversions except in limited heritage revitalization cases. | Not confirmed in the city documents we read. | Not confirmed. |
| Victoria | Accepted. When Metro Victoria's vacancy rate is below 4%, applications for more than 4 rental units are not accepted, with an appeal to Council. | A Tenant Plan signed by all tenants: notice, a tenant list, choices offered (a fixed-term tenancy or an option to buy), money help and agency referrals. | More than 4 rental units: not accepted under 4% vacancy in Metro Victoria. |
| Saanich | Accepted. Buildings of 3 or more residential units are not considered when the October CMHC vacancy rate is under 4%, but that rule does not apply to small-scale multi-unit housing units. Approval lapses after 18 months. | When applicable, a restrictive covenant that prevents evicting residential tenants because of the conversion. | 3 or more units: not considered under 4% vacancy, except small-scale multi-unit housing. |
| Kelowna | Accepted for small buildings. The Official Community Plan, as amended by Bylaw 12535 (adopted July 11, 2023), prohibits converting rental buildings of more than four units while Kelowna's rental vacancy rate is below 5%, unless the conversion creates affordable rental housing with a section 219 covenant on each strata title. | When tenants live there, the owner tells every tenant in writing that an application was made and tells them their rights under the Residential Tenancy Act. When Council decides, tenants get a letter at least 10 days before the meeting and may speak to Council. The application includes a Tenant Notification Form and any plan to relocate tenants. | Rental buildings of more than four units: no conversion while vacancy is below 5% (Official Community Plan, Bylaw 12535). |
| Abbotsford | Accepted. Council will not normally favour converting rental buildings of five or more units while the CMHC vacancy rate is 2.0% or lower for two surveys in a row, unless 75% of tenants want to buy a unit and qualify. An application may need a public hearing. | Tell all tenants within two weeks of applying, give a written relocation plan, list available rental homes for tenants who must move, and offer tenants first refusal to buy at an independently appraised market value, less the usual developer commission, before giving notice to leave. | Five or more rental units: not normally favoured at 2.0% vacancy or lower for two CMHC surveys in a row. |
| Nanaimo | Accepted. Rental buildings with four or more units cannot convert unless the rental vacancy rate is 3% or higher (Council Policy COU-018). The City warns that bringing older units up to the current Building Code may be difficult. | Signed consent from 80% of existing tenants on the City's Tenant Consent Form, copies of the leases, tenant names and addresses with any relocation plan, and a notarized declaration that each occupant got notice, the prospective sale prices, example strata fees and the building quality declaration. | Four or more rental units: not permitted unless vacancy is 3% or higher (Policy COU-018). |
| Port Coquitlam | Accepted through a Strata Title Subdivision Application, with no set timeframe. For a duplex, the City registers a covenant so a converted duplex unit cannot add a secondary suite, and takes a $5,000 landscape security. | Not confirmed in the city documents we read. | Not confirmed. |
| Port Moody | The policy recognizes an owner's right to apply. For an existing rental building of three or more units, it says Council would not in all likelihood approve the conversion. The City's guide says City approval is needed before a strata plan for any existing building is filed. | Not confirmed in the city documents we read. | Not confirmed. |
| Maple Ridge | Accepted. Council may approve, approve with conditions, refuse, or refuse until conditions are met. | Not confirmed in the city documents we read. | No fixed cutoff. Council weighs rental supply, and the City's guide calls a vacancy rate under 3% unhealthy. |
| Delta | Accepted. If the Director approves with conditions, the conditions must be met before the strata plan is endorsed, and zoning compliance must be settled first (Strata Title Conversion Application Guide, Form ST-4, June 2023). | Not confirmed in the city documents we read. | Not confirmed. |
CMHC in the table is the Canada Mortgage and Housing Corporation, whose rental survey sets the vacancy rate several cities use. Saanich's vacancy rule does not apply to small-scale multi-unit housing units, and its approval lapses after 18 months.
Burnaby: purpose-built rental stays rental
Burnaby's Stratification of Property guide, revised May 16, 2026, says that "strata conversion of existing purpose-built rental housing, except for duplex or semi-detached dwelling units, is not permitted." The rule goes back to Council's 1974 Rental Conversion Control Policy, a moratorium on condominium conversions with the same duplex exception.
The guide also says Burnaby does not require stratification, but once units are occupied they can only be stratified through a Strata Conversion application that Council authorizes. The occupied building must fully comply with the current Zoning Bylaw and BC Building Code. The guide does not define "purpose-built rental housing", so ask the City before you rent out a new Burnaby plex you may want to stratify later. Duplex and semi-detached units are named as the exception.
Vancouver R1-1: 7 or 8 units only as rental
Vancouver's R1-1 District Schedule (June 2026) ties the unit count to tenure. A multiple dwelling of 7 or 8 units is allowed only if it is secured as 100% residential rental tenure (s.3.1.1.3(a)), and 1 of the units may be occupied by a registered owner of the site (s.3.1.1.4). With any other tenure the maximum is 6 units. For strata on sites of 623 square metres or more with 17.1 metres of frontage or more, west of Ontario Street or Carrall Street, 5% of the floor area must be social housing or cash in lieu.
So an 8-unit R1-1 building can never become 8 strata lots. Its rental tenure is secured from the start. Vancouver's conversion guidelines also let the City refuse conversion of 3 or more units in C-2, RM-2 to RM-6, FM-1 or CD-1 zones where rental replacement rules apply.
If you stratify and then rent the lots
Rental is protected inside a strata. Since November 24, 2022, a change to the Strata Property Act bars any bylaw that screens tenants or otherwise restricts the rental of a strata lot (s.141). A future buyer of one of your lots can rent it out, and so can you. A strata may still limit or ban short-term rentals by a bylaw passed with a 3/4 vote, with fines up to $1,000 per contravention, daily (Regulation s.7.1).
On a rental strata lot, CRA's rental income guide lets you deduct strata fees that are your share of the upkeep, repairs, maintenance and other current expenses of the common property.
What stays unknown
- Whether stratifying after the GST self-supply rule applied changes the GST on a later sale of the strata units.
- Whether the home flipping tax's 730-day count starts again for each new strata lot. The tax is 20% of net income inside 365 days, and builder exemptions apply only if a return is filed.
- Whether BC Housing will release the 10-year rental covenant early.
- Tenant notice and inspection steps in cities outside the table above.
Get written answers from a tax accountant and from BC Housing before you commit to either path.
Best For
- ✓ Filing the strata plan while the building is still empty, then renting the strata lots.
- ✓ A long-term rental plan of 10 years or more, where the rental covenant and the 100% GST rebate fit the plan.
- ✓ A Burnaby duplex or semi-detached building, which the City excludes from its rental conversion ban.
Usually Fails When
- ✕ You expect to sell units within 10 years but built under the rental exemption.
- ✕ A tenant moved in before the strata plan was filed, in a city that refuses conversions below a vacancy rate.
- ✕ You need 7 or 8 units in Vancouver R1-1: those counts are allowed only as 100% rental.
- ✕ You assumed GST on a later sale works out the same after self-supply. That is unconfirmed.
What To Verify Before Spending Money
- → Whether your building permit used warranty insurance or the rental exemption.
- → The date the first unit is leased or occupied, which starts GST self-supply.
- → Your city's conversion policy and current vacancy test before you sign any lease.
- → The GST and flipping tax treatment of a later sale, with a tax accountant.
Common questions
Can I rent out my new plex and stratify it later? +
Yes, but the strata plan then needs city approval as a conversion under section 242 of the Strata Property Act, because the building has been occupied. The city may approve, add conditions or refuse, and its decision is final. If you file the strata plan before anyone moves in, you can rent the units and skip the conversion.
Can you stratify a rental building in BC? +
Yes, through a section 242 conversion approved by the city council or its delegate. Council must consider the priority of rental housing over owned housing in the area and any plan to relocate the people living there. Several cities restrict it: Burnaby does not permit conversion of existing purpose-built rental housing except duplex and semi-detached units, and others refuse rented buildings of 3 or more units when vacancy is below a set rate.
Does a short rental make a new building "previously occupied"? +
Yes. The Regulation defines previously occupied as occupied at any time, for any purpose. The only exception is the developer using a unit as a display unit.
What is the BC Housing rental exemption covenant? +
It is the price of the rental exemption, which waives builder licensing, home warranty and the related fees. A covenant on title restricts the sale or other disposition of any unit for 10 years from first occupancy, and BC Housing says it requires the building to be used only for rental.
Can the 10-year rental covenant be released early? +
We found no published way. The Regulation contains no release route, and BC Housing's page describes none. Whether BC Housing would release it, for example after warranty insurance is bought later, is not confirmed. Ask BC Housing Licensing and Consumer Services.
Do I pay GST if I rent out units I built? +
Yes, under the self-supply rule. A builder who rents its own new units accounts for GST on fair market value when the first unit is leased or occupied. The 100% purpose-built rental rebate or the 36% landlord rebate may offset it.
Does a fourplex qualify for the 100% purpose-built rental GST rebate? +
It can. The rebate needs at least 4 units each with its own kitchen, bathroom and living area, at least 90% held for long-term rental, construction started after September 13, 2023 and before 2031, and substantial completion before 2036.
If I stratify after renting, is GST charged again when I sell a unit? +
Not confirmed. Our sources do not say whether stratifying after the self-supply rule applied changes the GST on a later sale of strata units. Get advice from a tax accountant before you plan the sale.
Can I convert a rental building to strata in Burnaby? +
Burnaby's guide says strata conversion of existing purpose-built rental housing is not permitted, except duplex or semi-detached units. Its 2026 conversion fee is $2,000 for an R1 small-scale building of up to 4 units, plus $500 for each additional unit, plus a $265 strata title inspection fee (Consolidated Fees and Charges Bylaw No. 14485, consolidated August 25, 2026). Once occupied, any building must fully comply with the current Zoning Bylaw and BC Building Code.
Can I build 8 units in Vancouver R1-1 and sell them as strata? +
No. The R1-1 District Schedule allows 7 or 8 units only if they are secured as 100% residential rental tenure, with 1 unit allowed for a registered owner to live in. With any other tenure, the maximum is 6 units.
Do tenants have to agree to a strata conversion? +
The Strata Property Act sets no tenant consent rule. Cities do: Vancouver asks for written consent from at least two thirds of the households, Coquitlam asks for 60% of tenants in favour at 3 or more rental units, and Victoria asks for a Tenant Plan signed by all tenants.
Can a strata ban rentals after I sell the units? +
No. Since November 24, 2022, a change to the Strata Property Act bars any bylaw that restricts the rental of a strata lot (s.141). A strata can still limit or ban short-term rentals by a bylaw passed with a 3/4 vote.
Does the home flipping tax clock restart when I stratify? +
Not confirmed. The tax is 20% of net income on a property sold within 365 days, falling to nil at 730 days, and the Province lists subdividing property as generally not a taxable disposition. Whether the 730-day count starts again for each new strata lot is not stated in our sources.
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