Building a Tiny House: Permits and Municipal Regulations

Less expensive and more eco-friendly than a traditional home, tiny houses give new life to real estate by allowing families with modest incomes easier access to the property. There’s no need to go into debt for life, as the price of a tiny home is significantly more affordable compared to conventional houses. 

Their success has come so rapidly that most municipalities have been slow to make the necessary changes and adjustments to their by-laws. However, other cities have been more reactive by developing real urbanization projects focused on this type of housing. 

They attract people who want to live with ecological and innovative construction in mind. Of course, municipal by-laws can represent a brake and a real obstacle when it comes to realizing this project. 

What's a tiny house?

Both in Canada and the United States, the tiny house concept has been highly popular since the early 2000s. Choosing this type of habitation means opting to live with around 10% of the objects present in a regular house. The advantages are undeniable: reduced water and electricity consumption, fewer repairs to be made, less effort for maintenance and cleaning, as well as more time to devote to rest, leisure and family activities. 

This type of house is of particular interest to nature-loving couples, as well as young families wishing to own a cottage in the countryside, as well as the elderly who prefer to have a small house and don’t require much room.

How much does a tiny house cost?

It could be around $40,000 when built by the owner. Manufactured, it can cost between $60,000 and $75,000 and high-end models can go up to $150,000. Even if your project looks economical, it’s essential to plan this project adequately to avoid the unexpected. Thus, your budget should include the purchase of land, obtaining the right permits, the construction or purchase of small furniture and appliances (which tend to be more expensive than conventional ones), connection to public services, etc.

It’s important to note that obtaining a mortgage for this type of project can be difficult because banks are not yet familiar with this type of construction. Besides, mini-houses don’t increase in value over time. 

Need more information about the price of mini-houses? Read our article What is the cost of a mini house? and don't forget to take a look at our article Expectation vs. Reality: Living In a Tiny House.

Tiny houses: Municipal by-laws in Quebec and the rest of Canada

You should know that the Building Code, municipal regulations, and zoning rules govern the construction of this type of property. On this subject, let us specify that:

• The national building code of Quebec does not cover dwellings of less than 700 square feet.

• The Quebec provincial regulation on the construction and transformation of buildings prohibits the construction of buildings less than 320 square feet for a single-family home with one bedroom.

• The zoning by-laws in force in municipalities generally determine the minimum size of a house per sector, which often requires a derogatory administrative process.

•  In Quebec, it’s prohibited to install a tiny home as a residential annex.

However, in reality, each municipality asserts its regulations to match the criteria of tiny houses, On the other hand, others are more reluctant to face this phenomenon and don’t give themselves the means to adapt their regulations. 

Why are some municipalities reluctant to deal with tiny houses?

Although one may tend to think that a tiny house cannot cause any issues, the reality is quite different. If they are installed in a given neighbourhood, the municipality may fear that the establishment of this type of housing will lower the property value of the neighbouring houses. Also, the neighbours may feel the same concern and fear a decrease in the value of their property. 

Also, on the socio-cultural level, the tiny house is often associated with urban planning and current radical environmentalism which can negatively affect a municipality. This is because others will have to accept that the owners pay reduced taxes since a small house has less value than a traditional home. 

Which municipalities are open to tiny houses?

Lantier, an innovative municipality

In 2025, Lantier’s municipal council in the Laurentians authorized the development of an “eco-residential” sector to accommodate a hundred tiny houses. The developer, Habitat Multi-Generations, has built many homes from 350 to 800 square feet.

To enable this ecological project to be carried out, the municipality has to review its regulations and set the minimum surface area of a house in an area concerned by the project at 355 square feet. Three by-laws related to zoning, subdivision and permits and certificates have to be amended. 

Sherbrooke's Tiny House Neighbourhood 

In Sherbrooke, Richard Painchaud has set up the tiny home neighbourhood, in collaboration with the municipal authorities and local citizens. This area is located in the eastern part of the city, within a sector that is under development, as several companies, grocery stores, schools and restaurants are opening up as time goes by. The project is located on land that spans more than 700 000 square feet, but more than 50% of the surface will remain wooded, which is a great advantage for cross-country skiers and fans of snowshoeing or nature walks. 

The tiny homes in this neighbourhood measure 16 by 30 square feet, with ceilings that are 21 feet high. This will allow people to build rooms on the second floor. Count approximately $100,000 for a basic model.

Sainte-Marguerite-du-Lac-Masson in the Laurentians

Located in Sainte-Marguerite-du-Lac-Masson, the Nature on the Lake project will include tiny homes and single-family modular homes on 13 million square feet of land with a view of the lake. Over 200 lots will be available for the construction of tiny houses ranging in size from 384 to 800 square feet.

Count between $99,900 and $165,000 for a turnkey house (land and dwelling.) The price varies according to the size of the tiny house and according to the structure (foundation or piles) chosen. 

Tiny Houses in Dixville, Estrie

The municipality of Dixville has developed the Dixville Habitation Durable project, a program aimed at making the choice of a more ecological and energy-efficient construction accessible and profitable. Located in the village core of the municipality, the district will include several lots for construction, 6 lots in phase 1 and 12 additional lots in phase 2. We’d suggest consulting their fact sheet on the subject. 

Note that all new construction projects in the municipality, including mini-houses, are eligible for the Dixville Habitation Durable program. Through this approach, the municipality encourages citizens to contribute to sustainable development by promoting energy efficiency, and the use of sustainable materials, as well as improving the air quality of homes. To encourage people to get started, the municipality offers a subsidy program of $3,000, $5,000, or $8,000 depending on the level of certification attained.

Want to know if you're ready for the tiny house adventure? Take our quiz to find out!