What to expect when renovating a basement
Published Date:
Modified Date: Mar. 26, 2026
2 Minute Read
A basement renovation can add valuable living space, but it’s not a decision to take lightly.
Costs, construction timelines and insurance impacts can vary depending on the scope of work, from finishing a basement for personal use to creating a legal apartment. Here’s a practical look at what homeowners can expect before the work begins.
What to expect if you’re finishing a basement
The cost typically ranges from $35 to $45 per square foot. “Without a bathroom, it’s on the lower end,” says Yan Margulis of Cap-Able Group Basement Renovation, which has offices in Vaughan and Oakville.
Adding a basic three-piece bathroom makes it more expensive, and the price increases further once you start including upgrades such as bedrooms, offices, a kitchenette, a bar or a fireplace. Most projects take about three to four weeks to complete. In some cases, permits may be required—particularly if the renovation involves plumbing or structural changes. Once the renovation is finished, homeowners should also be aware that their home insurance premiums may increase if the home's overall value has risen.
What to expect if you’re putting in a basement apartment
This type of renovation typically starts at around $55 per square foot and can climb to $65, $70 or even $80, says Margulis. That higher cost is largely due to the safety requirements involved in creating a legal basement apartment. “A lot of building codes come into play, which require extra materials that aren’t necessary in a personal-use basement,” he explains. “The cost of materials is significantly higher, and the labour is as well.” For example, legal basement apartments must be fire-separated and soundproofed from the rest of the home.
The renovation itself usually takes about six weeks, with additional time required for inspections. Unlike personal-use basements, which are typically inspected once, basement apartments must be inspected at each stage of construction, including framing, insulation, HVAC and plumbing.
Permits are required for this type of renovation, including a second-dwelling permit that must be stamped by an engineer. Homeowners should also notify their insurance provider once tenants move in, as a rental unit in the home may affect insurance coverage and premiums.
What to expect if you’re waterproofing a basement
Costs generally range from $50 to $70 per linear foot when waterproofing is done from the inside. If the work involves excavating around the perimeter of the home to waterproof from the outside, homeowners can expect to pay about 20 to 30 per cent more. Interior waterproofing typically takes two to four days to complete, while exterior waterproofing usually takes about a week, depending on weather conditions.
Permits aren’t always required, but they may be needed if the project involves excavation or structural changes. Waterproofing on its own usually won’t affect home insurance premiums, although homeowners may see a decrease if they also install protective measures like a backwater valve or a sump pump with a battery backup. Purchasing CAA Water Coverage is also worth considering to help protect against potential flood-related losses.
We’re here to help
Do you have questions about how your renovation will affect your home insurance? A licensed CAA Insurance Agent can help, even if you’re with another provider or aren’t a CAA Member, to make sure you have the right coverage. CAA Members save on CAA Home Insurance¹, so it pays to join. Think of it as more money for renovating!
1 Home Insurance is underwritten by CAA Insurance Company. Certain conditions, limitations and underwriting guidelines apply.
