Tiny Homes on farms in Ontario?
- airbnb - vacation rentals - farming - homesteading
Do you own a farm in Ontario? Did you know you can have up to 4 tiny houses on your farm?
Three years ago I built my first tiny home. Today it makes me $30,000 per year in rental income. Here’s why I built it. I had completed some renovations for rental spaces on my family’s farm, and after the 3rd I thought “I want my own rental space!”
My Tiny Homes
Located at Fermanagh Farms, Schomberg, ON
Now I have two tiny homes, one on the farm and another at an RV park, both do well on Airbnb.
On the farm we plan to add more tiny homes, with 3 more we could generate $120,000 worth of rental income.
For our family farm our rental spaces made the difference. It allowed us to retire my grandparents, without selling off parts of the farm. With three units, which made $80,000 in revenue, we made our farm financially sustainable.
So what makes adding tiny homes possible on farms in Ontario?
Ontario allows “On-Farm Diversified Use” and has provided new incentives in recent years. In 2024 Bill 186 passed; this law minimizes liability for agritourism operators.
The OMAFRA is the Ontario Ministry of Agriculture, Food and Agribusiness. They offer guidelines for on-farm diversified use. These guidelines are quite extensive. This is because each municipality may set their own policies. Municipalities have the final decision for each instance. The OMAFRA offers a rule of thumb to farmers. The 2% rule: diversified use of farm land may take an area of up to 2% of a farm's property or 1 hectare, whichever comes first.
So if your farm is 100 acres you can have 2 acres of diversified use.
If your farm was 200 acres you could have 1 hectare (2.47 acres).
Ok so why only 4 tiny homes?
The Ontario law "R.R.O. 1990, Reg. 568: RECREATIONAL CAMPS" cites the Ontario campground definition. The law is as follows:
““class A camp” means a camp for recreational activities consisting of one or more tents, cabins, vehicles, buildings or other structures together with the land appertaining thereto, established or maintained as living quarters with or without charge for ten or more persons, for temporary occupancy of five or more days…”
So to avoid becoming a campground you must have less than 10 persons at your rentals. Each tiny home is for 2 people. This means with 4 tiny homes you’ll have 8 people and stay below the 10 person camp designation.
That is how you can have 4 tiny homes on your property, which could make you $120,000 in rental income. Make sure that your farm is big enough to fit the tiny homes on 2% of the land area. Make sure to add only four tiny homes or less, so you don’t become classified as a full campground. Finally, work with an experienced vacation rental company. This way you get your systems set up and also your spaces designed to attract guests.
Would you add tiny homes to your farm?