Can you get a mortgage to buy land in Ontario?

Yes, but with restrictions. For serviced urban lots (water, sewer, road), lenders typically require 20%–25% down and offer rates slightly above standard mortgage rates. For raw rural land, most major banks require 25%–50% down, and some will not finance raw land at all. Credit unions and private lenders are more flexible but charge higher rates. If you plan to build immediately, a combined lot-plus-construction mortgage may be available, which is typically easier to arrange than a standalone vacant land loan.

What is lot severance in Ontario?

A lot severance (consent to sever) is the legal process of splitting one property into two or more lots. It requires approval from the local Committee of Adjustment or Land Division Committee. The process involves an application fee ($1,500–$5,000+), a planning justification report, and compliance with the municipality official plan and zoning bylaw. Severance is common in rural Ontario where large properties can be divided. There is no guarantee of approval — factors include lot size, frontage, servicing, and conformity with planning policies.

What are the zoning rules for building on land in Ontario?

Every lot in Ontario is subject to zoning bylaws that dictate what can be built. Key zoning requirements include permitted uses (residential, agricultural, commercial), minimum lot size and frontage, building setbacks (distance from lot lines), maximum lot coverage, maximum building height, and parking requirements. Before buying land, always confirm the zoning permits your intended use. If the zoning does not permit what you want to build, you may need a minor variance (Committee of Adjustment) or a rezoning (zoning bylaw amendment) — both of which are time-consuming and not guaranteed.

How much does vacant land cost in Ontario?

Prices vary enormously by location and servicing. A serviced building lot in suburban GTA can cost $300,000–$800,000+. In smaller cities (London, Kingston, Barrie), serviced lots range from $100,000–$300,000. Rural acreage (unserviced) ranges from $30,000–$200,000 depending on location, access, and proximity to towns. Waterfront land commands a significant premium — $200,000–$1,000,000+ depending on the lake and region. Agricultural land (100-acre farms) ranges from $1,000,000–$3,000,000+ in southwestern Ontario.

What is the difference between serviced and unserviced land?

Serviced land has municipal water, sanitary sewer, storm sewer, hydro, roads, and sometimes natural gas already connected (or available at the lot line). Unserviced (raw) land has none of these — you must install a private well ($5,000–$15,000), septic system ($15,000–$40,000), driveway, and arrange for hydro connection ($5,000–$50,000+ depending on distance). Servicing costs for raw rural land can add $50,000–$150,000+ to your total project cost.

Buying Land in Ontario: Zoning, Severance, Financing & Building Permits (2026)

Updated April 2026

Buying land in Ontario — whether for building a home, investment, or future development — involves different considerations than buying an existing property. Here is your complete guide.

Types of land in Ontario

Type	Description	Price Range	Key Considerations
Serviced urban lot	Municipal water/sewer, paved road	$100K–$800K+	Ready to build; zoning and building permits required
Serviced suburban lot	New subdivision, all services	$150K–$600K+	Often purchased from a builder as part of a new-build package
Rural residential lot	Cleared, some services (may need well/septic)	$50K–$300K	Check servicing status carefully
Raw rural acreage	Unserviced, may have no road access	$30K–$200K+	Significant servicing costs; may need severance
Agricultural land	Farmland — zoned agricultural	$10K–$30K+ per acre	Strict zoning restrictions; limited residential building
Waterfront lot	Lake or river frontage	$100K–$1M+	Premium pricing; environmental and setback rules
Infill lot	Vacant lot in an established urban neighbourhood	$200K–$1M+	May involve demolition; check zoning for permitted density

Zoning and planning

Key zoning terms

Term	Description
Permitted use	What the zoning allows (residential, commercial, agricultural, mixed-use)
Minimum lot size	Smallest lot area allowed in that zone
Minimum frontage	Minimum width of the lot at the street line
Setbacks	Required distance from each lot line (front, rear, side) to any structure
Lot coverage	Maximum percentage of the lot that can be covered by buildings
Height restriction	Maximum building height (in metres or storeys)
Accessory structures	Rules for garages, sheds, garden suites

Before you buy — planning checklist

Item	How to Check
Zoning	Contact the municipality’s planning department or search their online zoning maps
Official Plan designation	Confirm the land is designated for your intended use
Severance history	Check if the lot was recently severed — conditions may apply
Conservation authority	Check if the lot falls within a Conservation Authority regulated area (floodplain, wetland, slope)
Environmental constraints	Endangered species habitat, significant woodlands, species at risk
Minimum Distance Separation (MDS)	If near agricultural operations, MDS formulas restrict how close you can build
Road allowance	Confirm the lot has legal access to a public road

The process

Step	Details
1. Pre-consultation	Meet with the municipality’s planning department to discuss feasibility
2. Application	Submit to the local Committee of Adjustment or Land Division Committee
3. Required documents	Plot plan, planning justification, servicing assessment
4. Public notice	Neighbours and agencies are notified and can provide comments/objections
5. Hearing	Committee hears the application — you (or your planner) present
6. Decision	Approve (with or without conditions), refuse, or defer
7. Conditions	Typical conditions: road widening, parkland dedication, municipal fees, replanning
8. Appeal	Decisions can be appealed to the Ontario Land Tribunal (OLT)

Severance costs

Cost	Amount
Application fee	$1,500–$5,000+ (varies by municipality)
Planning consultant	$3,000–$8,000
Survey	$2,000–$5,000
Parkland dedication / cash-in-lieu	5% of land value or equivalent cash
Road widening / municipal requirements	Varies
Legal fees	$1,500–$3,000
Total	$10,000–$25,000+

Financing vacant land

Financing Option	Down Payment	Rate	Notes
Bank vacant land mortgage (serviced)	20%–25%	Prime + 0.5%–2%	Some major banks offer this
Bank vacant land mortgage (unserviced)	25%–50%	Higher	Fewer lenders; credit unions more flexible
Combined lot + construction mortgage	20%–25% of total project	Construction rates	Best option if building immediately
Private lender	25%–40%	8%–14%	Short-term; higher cost but more flexible
Cash	100%	N/A	Simplest approach
HELOC on existing property	N/A	Prime + 0.5%–1%	Use equity in your current home
Vendor take-back (VTB) mortgage	Varies	Negotiated	Seller finances part of the purchase

Building on your land

The building permit process in Ontario

Step	Timeline	Details
1. Confirm zoning compliance	1–4 weeks	Verify your plans meet zoning requirements
2. Site plan / minor variance (if needed)	2–6 months	Required if your plans do not fully conform
3. Design and engineering	2–6 months	Architect/designer prepares drawings; engineer provides structural, septic, etc.
4. Submit building permit application	1–4 weeks	Plans, engineering, septic design (if applicable)
5. Permit review	4–12 weeks	Municipality reviews for Ontario Building Code compliance
6. Permit issuance	After approval	Pay permit fees and development charges
7. Build	10–18 months	Construction per approved plans
8. Inspections	During construction	Municipal inspections at key stages (footings, framing, plumbing, electrical, final)
9. Occupancy permit	After final inspection	Required before you can move in

Septic system requirements

Factor	Details
When needed	Any property not connected to municipal sewer
Design	Must be designed by a qualified designer and approved by the municipality or health unit
Soil test (percolation test)	Required to determine soil absorption capacity — do this before buying
Types	Conventional (bed/trench), raised bed, tertiary treatment (for challenging soils)
Cost	$15,000–$40,000+ depending on type and soil conditions
Setbacks	Minimum distances from well, property lines, water bodies
Maintenance	Pumping every 2–3 years ($300–$500)

Well requirements

Factor	Details
When needed	Any property not connected to municipal water
Type	Drilled well (most common), dug well, or bored well
Cost	$5,000–$15,000 for a drilled well
Flow rate	Minimum 3 imperial gallons per minute recommended for a single-family home
Water quality testing	Required — test for bacteria, nitrates, minerals
Setbacks	Minimum distances from septic system, property lines
Risk	There is no guarantee of finding sufficient quality/quantity of water

Rural vs urban land

Factor	Urban / Suburban	Rural
Price per acre	Much higher ($200K–$1M+ per lot)	Lower ($5K–$50K per acre)
Servicing	Municipal water/sewer available	Well and septic required
Road access	Paved, municipal maintenance	May be seasonal, private, or unmaintained
Hydro	At the lot line	May need to extend ($10K–$50K+)
Financing	Easier to finance	More difficult — fewer lender options
Zoning	Residential zones — generally clear	Agricultural, rural residential — more restrictions
Development charges	$20,000–$100,000+ for new builds	Lower or none
Building timeline	Faster (services available)	Longer (servicing adds time and cost)

Due diligence checklist for buying land

Confirm zoning and permitted uses
Verify the lot has legal road access (frontage on a public road)
Check for easements, rights-of-way, or encumbrances (title search)
Order a survey or review existing survey
Check Conservation Authority mapping (floodplain, wetland, hazard lands)
Perform a soil test / percolation test (if septic is needed)
Confirm hydro availability and connection cost
Review the municipality’s official plan for the area
Ask about development charges and parkland fees
Check for restrictive covenants or subdivision agreements
Confirm the lot was not previously used for industrial/commercial purposes (contamination risk)
Discuss your building plans with the municipality’s building department before closing