Permits & Economics | Development Charges

Development Charges and What Bill 23 Exempts

Development charges fund the services a new home draws on, and they can move a small project's numbers meaningfully. The provincial Bill 23 exempts the second and third residential units on a lot from development charges and parkland. The fourth unit and beyond is a different story — and one we will be honest about rather than guess at. We do not publish dollar figures here; those come from the City's by-law.

Key Takeaways

✓Bill 23 exempts the second and third units on a lot from development charges and parkland.
✓A triplex falls within that provincial exemption for its added units.
✓The fourth-plus unit (fourplex, sixplex) is not automatically exempt — confirm with the City.
✓We publish no dollar figures — pull current rates from the City's development-charges by-law.

Unit by Unit, How the Exemption Works

Unit on the lot	DC / parkland treatment	Detail
Second unit on a lot	Exempt	Bill 23 exempts the second residential unit on a lot from development charges and parkland dedication.
Third unit on a lot	Exempt	The third unit is also exempt from development charges and parkland under Bill 23.
Fourth unit and beyond	Not automatically exempt	The provincial exemption is written for the second and third units. The treatment of the fourth-plus unit (a fourplex, or a sixplex) is not confirmed exempt from a City source — confirm it against the City's current development-charges by-law.

Exemption from Bill 23 (ERO 019-6197) and the Bill 23 development-charge changes (ERO 019-6172). The treatment of the fourth-plus unit must be confirmed against the City of Toronto's current development-charges by-law.

Why the Fourth Unit Is the Honest Question

The provincial exemption language is specific: it covers the second and third residential units on a lot. Toronto's by-law lets you build a fourth unit city-wide, and up to six in nine wards — but going past three units is a municipal permission, not a provincial development-charge exemption. The two things are not the same.

We have not found an official City source confirming that the fourth, fifth, or sixth unit is exempt from development charges. So the responsible move is to underwrite the fourplex or sixplex on the assumption that units past the third may carry charges, and then confirm the actual treatment — and the dollar amounts — against the City's current development-charges by-law. Do not let a pro forma assume an exemption that the law does not clearly grant.

Best For

✓ Triplexes, where the added second and third units fall within the Bill 23 exemption.
✓ Owners who confirm the fourth-plus-unit treatment against the City by-law before underwriting.
✓ Pro formas that keep the development-charge question explicit instead of assuming zero.

Usually Fails When

✕ A fourplex or sixplex pro forma assumes every unit is DC-exempt — the exemption covers units two and three.
✕ Stale or invented dollar figures are used instead of the City's current by-law rates.
✕ The provincial exemption and the municipal unit permission are treated as the same thing.

What To Verify Before Spending Money

→ That your project relies only on the confirmed second-and-third-unit exemption.
→ The fourth-plus-unit development-charge treatment in the City's current by-law.
→ The actual current charge amounts directly from the City — never an estimate.

Where to Go Next

Bill 23 (Ontario)

The provincial law behind the exemption.

What Drives Cost

Where the charge threshold sits among cost drivers.

Financing

How fees fold into the project funding.

Frequently Asked Questions

Does Bill 23 exempt my multiplex from development charges? +

Bill 23 exempts the second and third residential units on a lot from development charges and parkland dedication. So for a triplex — three units — the added units fall within that provincial exemption. What Bill 23 does not clearly settle is the fourth unit and beyond: the exemption is written for the second and third units, so a fourplex or sixplex is not automatically exempt for its extra units. Confirm the treatment against the City of Toronto's current development-charges by-law before you underwrite.

Is a fourplex exempt from development charges in Toronto? +

Not automatically, and we will not pretend otherwise. The provincial Bill 23 exemption covers the second and third units on a lot. The fourth unit sits outside the language of that exemption, and we have not found an official City source confirming a fourplex is exempt for its extra units. The honest answer is to treat the fourth-plus unit as potentially chargeable and confirm it with the City's current development-charges by-law. We do not publish dollar figures because they change and are set by the City.

What about a sixplex — are all six units exempt? +

No. The same logic applies, more so. Bill 23 exempts the second and third units. A sixplex has units well beyond that threshold, and there is no provincial exemption written for the fourth, fifth, or sixth unit. So a sixplex should be underwritten on the assumption that units past the third may carry charges, with the exact treatment confirmed against the City's current by-law.

Why don't you list the dollar amounts? +

Because development charges are set by the City of Toronto, change on their own schedule, and depend on the project. Publishing a number here would go stale and could mislead a pro forma. The useful, durable facts are the structure — second and third units exempt under Bill 23, fourth-plus not automatically exempt — and the instruction to pull the current rates from the City's development-charges by-law yourself.

Where do I confirm the current charges? +

From the City of Toronto's development-charges by-law and the City's fee information, read together with the provincial Bill 23 changes for the unit exemptions. The provincial ERO notices set the second-and-third-unit exemption; the City by-law sets the actual rates and how it treats additional units. Confirm both before relying on any number.