Policy & Zoning | Bill 23 (Ontario)

Bill 23: The Provincial Three-Unit Floor

Before Toronto's four-unit by-law, the province set the floor. Ontario's More Homes Built Faster Act (Bill 23), which received Royal Assent on November 28, 2022, requires municipalities to permit up to three residential units as-of-right on serviced residential lots. Toronto then exceeded that floor, going to four units city-wide. Here is what the provincial law actually requires.

Key Takeaways

✓Bill 23 = the More Homes Built Faster Act, 2022, Royal Assent November 28, 2022.
✓Up to three units as-of-right on serviced residential lots in settlement areas.
✓No minimum unit size, parking capped at one space per unit.
✓The 2nd and 3rd units are exempt from development charges and parkland. Toronto went to four.

What Bill 23 Requires

Up to three units as-of-right

On a serviced parcel in a settlement area where residential is permitted, up to three residential units are allowed as-of-right — for example three units in the primary building, or two in the primary plus one ancillary unit.

No minimum unit size

Municipalities cannot impose a minimum size on these additional residential units. That removes a tool that had been used to limit small infill units.

Parking capped at one per unit

A municipality cannot require more than one parking space per unit for these added units. Toronto goes further on multiplexes — it removed parking minimums entirely in 2022.

No charges on the 2nd and 3rd units

The second and third units on a lot are exempt from development charges and from parkland dedication requirements. That is a real cost difference written into the provincial framework.

Provisions from the Environmental Registry of Ontario Notice 019-6197 and the More Homes Built Faster Act, 2022.

Province Mandates Three; Toronto Built to Four

Bill 23 is a floor, not a ceiling. The province requires every municipality to allow up to three units as-of-right; nothing stops a city from going higher. Toronto did. Its 2023 multiplex by-law permits up to four units city-wide, and the 2025 sixplex permission goes to six in nine wards.

One detail to carry into underwriting: the development-charge exemption in Bill 23 is written for the second and third units. It does not, on its face, say anything about a fourth or sixth unit. The charge treatment of larger multiplexes should be confirmed against the City's current by-law, not assumed from the provincial exemption.

Best For

✓ Understanding the provincial baseline beneath Toronto's four-unit by-law.
✓ A triplex, which sits exactly at the Bill 23 three-unit floor.
✓ Reading the development-charge exemption for the 2nd and 3rd units correctly.

Usually Fails When

✕ Treating Bill 23 as a ceiling — it is a floor; Toronto permits four units city-wide.
✕ Assuming the 2nd/3rd-unit DC exemption automatically covers a 4th or 6th unit.
✕ Confusing the Bill 23 one-space parking cap with Toronto's full removal of parking minimums.

What To Verify Before Spending Money

→ Whether the lot is serviced and in a settlement area where residential is permitted.
→ The City of Toronto by-law that applies on top of the provincial floor (up to four units).
→ How development charges apply to your specific unit count under the City's current by-law.

Where to Go Next

The Multiplex By-law

How Toronto exceeded the three-unit floor.

Bill 185 & Bill 109

The provincial red-tape reforms that came after.

Development Charges

What the 2nd and 3rd-unit exemption means for you.

Frequently Asked Questions

What is Bill 23 in Ontario? +

Bill 23 is the More Homes Built Faster Act, 2022, which received Royal Assent on November 28, 2022. Among other changes, it requires municipalities to permit up to three residential units as-of-right on serviced lots in settlement areas where residential is allowed, removes minimum unit sizes, caps parking at one space per unit, and exempts the second and third units from development charges and parkland dedication.

How many units does Bill 23 allow as-of-right? +

Up to three. On a serviced parcel in a settlement area where residential use is permitted, Bill 23 requires that up to three residential units be allowed as-of-right — for instance three units in the primary building, or two primary units plus one ancillary unit. It is a provincial floor; municipalities can permit more.

Did Toronto go further than Bill 23? +

Yes. Bill 23 set a three-unit floor. Toronto adopted its own multiplex by-law in May 2023 permitting up to four units as-of-right city-wide, and in 2025 added up to six units in nine wards. So in Toronto, the provincial three-unit rule is the backstop and the City's by-law is the higher local permission a builder works from.

What does Bill 23 do about development charges? +

It exempts the second and third residential units on a lot from development charges and from parkland dedication. Note that this exemption is written for the second and third units specifically. Whether and how charges apply to a fourth unit or beyond should be confirmed against the City of Toronto's current development charge by-law before underwriting.

Does Bill 23 remove parking requirements? +

It caps them. For the additional units it covers, a municipality cannot require more than one parking space per unit. That is a cap, not a full removal. Toronto separately removed parking minimums for duplexes, triplexes, and fourplexes in 2022, which is a deeper change than the Bill 23 cap.

Where can I read the Bill 23 changes? +

The Environmental Registry of Ontario notice 019-6197 describes the More Homes Built Faster Act changes, and the statute itself is published on ontario.ca. Both are linked in the sources on this page. Toronto's own multiplex pages do not cite Bill 23 directly, so the provincial floor and the City by-law are best read side by side.