Editor's note, October 6, 2026: this article was reviewed and rewritten in our accuracy check. An earlier version contained price-per-square-foot ranges, fee amounts, typical timelines and market claims we could not trace to a source; they have been removed or replaced with figures from the sources listed at the end of the article.
Buying a condo before it is built means signing today for a home you will move into years from now, and paying a deposit in instalments along the way. The law gives you more protection than many buyers realise, but only if you use it. Here is what to check, in the order it comes up.
1. Check the builder first
Every new-home builder and vendor in Ontario must be licensed by the Home Construction Regulatory Authority (HCRA). Look the builder up in the Ontario Builder Directory, which shows licence status, past projects and any conduct issues, before you visit a sales centre.
2. Use the 10-day cooling-off period
Under section 73 of the Condominium Act, 1998, you can cancel a new condo purchase within 10 days and get your deposit back. The clock starts once you have the disclosure statement and a copy of the agreement signed by both parties; the Condominium Authority of Ontario says you should also receive the Residential Condominium Buyers' Guide. Use those days to have a real estate lawyer review the agreement, the disclosure statement, the deposit schedule and the list of closing adjustments. Freehold homes bought from a builder have no statutory cooling-off period.
3. How your deposit is protected
For condos, the Condominium Act requires deposits to be held in trust or otherwise secured. If they were not, Tarion's warranty protects up to $20,000. Ask the builder in writing how your deposit is held, and keep every receipt. Deposit schedules vary by project; make sure you can pay each instalment on time, because missing one is usually a default under the agreement.
4. Interim occupancy
Most new condos let buyers move in before the building is registered as a condominium. During this interim occupancy period you do not own the unit yet and do not have a mortgage on it; you pay the builder a monthly occupancy fee. Under the Condominium Act, that fee is limited to interest on the unpaid balance of the price, the estimated municipal taxes for the unit, and the projected monthly common expenses. None of it reduces your price. The period ends when the condominium is registered and your purchase closes, and you cannot know in advance how long that will take, so budget for it alongside your current rent or mortgage.
5. Closing adjustments
The agreement lists costs the builder can add on closing, such as increases in development charges, utility connection fees and Tarion enrolment. The Development Charges Act sets the rules for how municipalities levy development charges; whether you pay an increase depends on your agreement. Ask for the full adjustments schedule and whether there is a cap, and have your lawyer explain each line. Land transfer tax is calculated on the price at final closing; in Toronto it includes the municipal tax (on a $800,000 unit, $24,950 before any first-time buyer refunds).
6. HST and the rebates
New condos carry 13% HST, usually built into the price with the rebates assigned to the builder. Check which rebates the price assumes, and what happens if you don't qualify:
- Ontario's permanent new housing rebate: up to $24,000 of the provincial part, for a home you or a relative will live in.
- Federal first-time home buyers' GST rebate (law since March 2026): up to $50,000 of the 5% federal part, for agreements signed from March 20, 2025, full to $1 million and none from $1.5 million.
- Ontario's first-time buyer rebate: up to $80,000 of the 8% provincial part, following the federal conditions.
- Ontario enhanced new housing rebate (temporary): up to $80,000 of the provincial part for agreements signed from April 1, 2026 to March 31, 2027, for buyers who will live in the home.
Buyers who rent the unit out usually cannot claim the owner-occupier rebates; the CRA has a separate rental property rebate. Expect the builder to add any rebate you don't qualify for back to the price on closing.
7. Financing years from now
You will apply for your mortgage close to final closing, at the rates and rules in force then. Today you would have to qualify at the greater of 5.25% or your contract rate plus 2 points. A pre-approval now does not guarantee a mortgage in a few years, so leave room in your budget for higher rates or a lower appraisal than the price you agreed.
8. Assignments
An assignment is when you sell your rights under the agreement before final closing. Most agreements require the builder's consent and many charge a fee. On a new home, the CRA treats the assignment amount above the deposit as generally subject to HST (Info Sheet GI-120). And under the federal flipping rule, a gain on housing, or on a right to acquire housing, held for less than 365 days is generally taxed as business income. Read our assignment guide before you count on selling before closing.
9. The pre-delivery inspection and warranty
Before you take possession you'll walk through the unit with the builder and record deficiencies on the PDI form. The Tarion warranty then covers defects for one, two and seven years. See our Tarion guide.
Is pre-construction right for you?
It can suit buyers who want a new home, can wait for an uncertain occupancy date, and can comfortably carry deposits plus interim occupancy fees. It suits buyers less well if they need a firm move-in date or are at the top of what they can qualify for. Compare it with resale in our pre-construction vs resale comparison.
Want a second pair of eyes on a project? Book a call with a licensed Summitly agent, or ask Zara, Summitly's AI virtual agent, to list the questions to bring to your lawyer.
