Buying a Store With an Apartment Above in Etobicoke (2026)

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty — Main streets and BIAs, CR zoning, CMHC and BDC rules, HST split, RTA vs Commercial Tenancies Act, fire code, insurance, Vacant Home Tax

Looking for a main-street building with a shop below and a flat above? Tell me your plan and budget and I will send you buildings that fit as they come up.

What is a store with an apartment above, legally?

On a Toronto main street, the “store with an apartment above” is usually a two- or three-storey building with a shop at grade and one or two flats upstairs, often with a separate street door to the stairs. In zoning terms it is a mixed use building: Toronto Zoning By-law 569-2013 defines that as a building with a dwelling unit and a non-residential use. Lenders, insurers, the tax rules and the tenancy rules all treat the two floors differently, and that split is what makes this property type both useful and tricky.

Buyers usually fall into one of three groups: owner-operators who want to run their own shop downstairs, owner-occupiers who want to live upstairs and rent out the store, and investors who want two rent streams. Each plan changes the financing, the HST and the tenancy law, so pick yours before you start viewing.

Which Etobicoke and west Toronto main streets have this stock?

The west end’s store-and-apartment stock sits mostly on the old streetcar and village main streets. A good way to map it is by Business Improvement Area (BIA), because the City publishes each BIA’s boundaries. The table uses the City’s own BIA descriptions (as at October 2026). It shows where the frontage is, not what is for sale or how any lot is zoned.

For The Queensway in more detail, see my guide to The Queensway in Etobicoke. If you mainly want to work from home rather than own a storefront, my post on live/work units in Etobicoke and what zoning allows covers that side.

What does CR zoning allow on these streets?

Most traditional main-street frontage in the old city and inner Etobicoke is zoned Commercial Residential (CR) under Chapter 40.10 of Toronto Zoning By-law 569-2013. Always confirm the zone label for the exact lot. Here is what the chapter says that matters for a store-and-apartment building:

• Building types for dwelling units (40.10.20.40): an apartment building, a mixed use building or (outside Policy Areas 3 and 4) a townhouse, but only on a lot whose zone label has an “r” value greater than 0.0. If the label reads r0.0, no new dwelling units are allowed.
• Non-residential uses (40.10.20.10): office, medical office, personal service shop, artist studio, financial institution, pet services, production studio and others are permitted outright. Retail stores, eating establishments, custom workshops and similar uses are permitted with conditions in 40.10.20.20 and 40.10.20.100.
• Where the homes go (40.10.40.1(1)): in a CR mixed use building, dwelling units must be above the first storey. There are narrow exceptions for ground-floor units behind the store, for example on some corner lots, or where access is through a common inside area and the commercial space is at least 15.0 metres deep from the front wall.

Also check Chapter 900 for a site-specific exception. If you plan to change the store’s use (say a shop to a restaurant), you may need a permit. My guide to change of use permits for commercial tenants covers when that applies.

How do you finance a store with an apartment above?

This is where most deals get decided. Your lender will look at how much of the building is commercial and who occupies it.

• CMHC-insured multi-unit loans are for bigger buildings. CMHC’s Standard Rental Housing product requires at least five rental units and that the project be at least 70% residential by both floor area and total loan value, with a maximum loan-to-value of 85%. A typical two-flat-over-a-store building does not qualify.
• CMHC Income Property covers 2-to-4-unit rental properties with a 20% minimum down payment. According to CMHC’s product page, the property must not be owner-occupied. The body of that page does not say how commercial space is treated, so ask your lender before you count on it.
• Lender mixed-use rules. As an example of how lenders draw the line, First National says CMHC considers a mixed-use property where the non-residential part is under 30% of the floor space and under 30% of gross income. Once the store is a bigger share than that, expect conventional commercial terms.
• Owner-operator loans. If your business will occupy the store, the BDC commercial real estate loan advertises financing of up to 100% of project cost, amortization up to 25 years and loans that typically start at $100,000. It looks for about 24 months of operating history, and the page excludes projects zoned for residential use. Ask BDC directly how it treats a CR mixed use building.

On small main-street buildings, every lender has its own rules. Some banks will write a residential mortgage if the store is small and you live upstairs. Others send the file to their commercial desk: a larger down payment, a shorter term and an appraisal based on the rents. Get a mixed-use pre-approval before you offer. My post on cap rates, NOI and DSCR shows how a commercial underwriter will look at the rents.

Do you pay HST on a store with an apartment above?

Often, on part of it. The CRA’s GST/HST Memorandum 19.4.1 says that when real property is used partly for commercial purposes and partly for residential purposes and is sold, it is treated as two separate supplies. Its example is an apartment building with a mall on the first floor. Paragraph 8 says a sale of commercial real property is generally a taxable supply, while used residential complexes are generally exempt. Memorandum 19.2.1 applies the same separate-supply rule from the residential side.

• The price has to be allocated between the commercial part and the residential part. That allocation sets the HST.
• Under paragraph 12 of 19.4.1, a purchaser who is registered for GST/HST generally self-assesses and remits the tax rather than paying it to the seller. Buyers who are not registered usually pay it on closing.
• The wording in the agreement matters. “HST included” and “plus HST, if applicable” put the cost on different parties. See my notes on HST clauses in an Ontario agreement of purchase and sale.

Have your accountant settle the allocation and your registration status before you sign.

Which law governs the tenants on each floor?

Two different statutes.

• Apartment upstairs: the Residential Tenancies Act, 2006 applies. That brings the standard lease, Landlord and Tenant Board process, notice rules and the rent increase guideline. Section 6.1 exempts units in buildings where no part was occupied for residential purposes on or before November 15, 2018 from the guideline. Most older main-street flats were occupied long before that, so the guideline usually applies.
• Store at grade: the Commercial Tenancies Act and the written lease govern. Section 2 says the Act does not apply to tenancies the RTA covers. Section 18(1) lets a landlord re-enter if rent stays unpaid for fifteen days, unless the lease says otherwise. Most of the deal lives in the lease. Read my guide to commercial lease clauses before you take one over.
• One tenant, both floors: RTA section 5(j) exempts “premises occupied for business or agricultural purposes with living accommodation attached if the occupancy for both purposes is under a single lease and the same person occupies the premises and the living accommodation.” Separate leases for the store and the flat, or different occupants, usually put the flat back under the RTA.

What fire safety rules apply to an apartment over a store?

The Ontario Fire Code (O. Reg. 213/07) applies to existing buildings, whatever the zoning says.

• Smoke alarms (2.13.2.1): required outside sleeping areas and on each storey of a dwelling unit. Under 2.13.1.2, for a rental suite the landlord is the owner responsible.
• Carbon monoxide alarms (2.16.2.1(2)): if a fuel-burning appliance (say a furnace or a restaurant’s equipment) sits outside the apartment, CO alarms are required in the service room and next to each sleeping area of any suite that shares a wall or floor with it. In a store-and-flat building this catches a lot of people.
• Retrofit, Section 9.5: applies to buildings of six storeys or less with more than two dwelling units where, for example, one unit is above another with shared exits. It sets minimum fire separations (30-minute floor assemblies for buildings up to 3 storeys and 600 m², under 9.5.2.2), including where the store affects residents’ life safety.

Adding or splitting a unit needs a building permit, and the CR rules above still apply. Before you pay for upside that has not been built, ask for the permit history and any Toronto Fire Services orders.

How do you insure a mixed-use building?

A standard home policy is not written for a building with a commercial tenant. In my files, most main-street owners carry a commercial property policy with liability and loss-of-rents coverage for both tenancies. The store tenant carries their own liability and contents insurance naming you as an additional insured, and the flat tenant carries tenant insurance. The store’s use drives the price: a restaurant with cooking equipment costs far more to insure than an office. Get a quote during your conditional period. My guide to landlord insurance in Ontario covers the residential side.

Does Toronto’s Vacant Home Tax apply to the apartment?

It can. On the City’s Vacant Home Tax page, no declaration is needed only if a property is “assessed fully as multi-residential, commercial or industrial.” A building with a residential part generally has to be declared each year by the deadline (April 30). Beginning with the 2024 tax year, the rate is 3% of the property’s Current Value Assessment.

The property counts as occupied if it is your principal residence for at least six months of the year, or if tenants have written agreements of at least 30 days and at least six months in total during the year. The City says “tenant” includes business tenants. Buying mid-year? Ask the seller for their filed declaration. See my Vacant Home Tax 2026 guide for the deadline traps.

What does a Business Improvement Area mean for an owner?

The City says a BIA is made up of commercial and industrial property owners and their non-residential tenants in a defined area. BIA operating budgets are paid for by a special levy on the commercial and industrial properties within the boundary. As the owner, you pay that levy on your property tax bill for the commercial portion. Most commercial leases pass it to the store tenant as part of additional rent. Read the lease to see whether yours does.

BIAs fund streetscaping, festivals and promotion. Owners on these streets can also apply to the City’s Commercial Façade Improvement Grant Program. It covers buildings that are commercial at street level with residential uses above. As at October 2026 applications are closed, and work started before approval is disqualified.

What should you check before you make an offer?

Frequently asked questions

Sources

• City of Toronto — Zoning By-law 569-2013, Chapter 40.10 Commercial Residential (CR) Zone — Permitted uses, building types for dwelling units, residential uses above the first storey (40.10.40.1)
• CMHC — Standard Rental Housing mortgage loan insurance — Minimum 5 units, at least 70% residential by floor area and loan value, 85% max LTV
• CMHC — CMHC Income Property — 2-to-4-unit rental, 20% minimum down payment, non-owner-occupied
• First National Financial — Mixed-use CMHC financing — Lender description of CMHC mixed-use thresholds (non-residential under 30% of floor space and income)
• BDC — Commercial real estate loan — Up to 100% of project cost, 25-year amortization, eligibility and exclusions
• Canada Revenue Agency — GST/HST Memorandum 19.4.1, Commercial Real Property: Sales and Rentals — Mixed residential/commercial property treated as separate supplies; commercial sales generally taxable; purchaser self-assessment
• Government of Ontario — Residential Tenancies Act, 2006 — Section 5(j) single-lease business-plus-living exemption; section 6.1 post-2018 rent rule exemption
• Government of Ontario — Commercial Tenancies Act — Section 2 (does not apply to RTA tenancies); section 18 re-entry after fifteen days’ unpaid rent
• Government of Ontario — Fire Code, O. Reg. 213/07 — Smoke and CO alarm rules (2.13, 2.16) and Part 9 retrofit for multi-unit residential buildings (9.5)
• City of Toronto — Vacant Home Tax — 3% of CVA from 2024, declaration exemptions, occupancy rules including business tenants

Related reading

• Commercial lease use clauses in Ontario
• Buying a tenanted property in Ontario: the rent clauses
• Drafting a commercial lease review condition
• The Queensway, Etobicoke: a reference guide
• How commercial property is valued in the GTA