Zoning is the set of municipal rules that decides what can legally exist on a piece of land, and zoning in Toronto shapes a purchase more than most buyers expect. It controls how a property can be used and how many dwelling units are allowed on it. It also limits height, setbacks from the property line and lot coverage.
Almost every property in the city falls under Zoning By-law 569-2013. You can check any address yourself on the City of Toronto's interactive zoning map before you write an offer. A small number of parcels appear in grey on that map, which means they are still governed by the pre-amalgamation by-laws of the former municipalities and have to be looked up separately.
The letters attached to a residential parcel carry most of the information. RD is Residential Detached, RS is Residential Semi-Detached, RT is Residential Townhouse, and RM is Residential Multiple. A plain R zone is broader and allows a wider mix of housing forms. The city also uses commercial, mixed use, employment, institutional and open space categories, so a corner lot on a residential street can carry very different permissions from the house beside it.
Up to four residential units are now permitted as of right on residential lots across Toronto, and six units are permitted in the Toronto and East York district and in Ward 23. That changes the math for buyers thinking about rental income. Permission to have four units is not the same as having four legal ones, though. If a basement suite is part of what makes the listing attractive, read what makes a basement apartment legal in Toronto before assuming it qualifies. A laneway suite has its own siting requirements on top of the zoning category.
Anything you want to build that falls outside the numbers in the by-law goes to the Committee of Adjustment as a minor variance application. That process takes months and can be refused. Buildings that predate the current rules are often allowed to continue as legal non-conforming uses, but that status can be lost if the use stops or the structure is substantially altered. Renovations done without permits sit in a different category again, which is worth understanding before you buy or sell a house with unpermitted work.
Zoning says nothing about who owns the land or where the boundaries actually sit. That information comes from title and from a survey.
Related reading: What Makes a Basement Apartment Legal in Toronto?, What Is a Laneway Suite and Can You Build One in Toronto?, and Do You Need a Property Survey When Buying in Ontario?