PreConstruction Homes & Condos

Most Toronto and GTA pre-construction condos collect deposits in stages over the construction window, typically totaling 15% to 20% of the purchase price before occupancy. A common Toronto schedule is 5% on signing, 5% in 30 days, 5% in 180 days, and 5% on occupancy, though developers vary the cadence and percentages by project. International buyers usually pay 35%. Always confirm the exact schedule and any extended-deposit options in your purchase agreement, since these payments are not refundable after the 10-day cooling-off period elapses.

Ontario's Condominium Act gives buyers of pre-construction condos a 10-day rescission period beginning the day they receive a fully signed purchase agreement together with the disclosure statement. During those 10 days you can cancel for any reason and recover your deposit in full. After the 10 days expire your obligations under the agreement are binding. Use the cooling-off period to have a real estate lawyer review the agreement, the disclosure statement, condo budget, rules, and any builder-specific risk clauses.

When a pre-construction condo is ready for you to move in but the building has not yet registered with the land registry, you enter the interim occupancy period. During this time you do not own the unit yet. You pay the developer a monthly occupancy fee that covers three components: estimated mortgage interest on the unpaid balance, estimated common element fees, and estimated property tax. Occupancy fees are not principal, they do not build equity, and they are not tax-deductible. The interim period typically lasts 3 to 18 months, longer in larger projects. Final closing happens once the condo corporation is registered.

Tarion is the regulator of Ontario's new home warranty program and provides three layers of coverage for new builds: a one-year warranty on workmanship and materials, a two-year warranty on plumbing, electrical, heating, and exterior cladding, and a seven-year warranty on major structural defects. There is also pre-delivery deposit protection up to set limits while the home is being built. Submit any deficiencies through Tarion's MyHome portal within the warranty window, and document everything with dated photos at your pre-delivery inspection.

Most GTA developers permit assignment but charge an assignment fee, often $5,000 to $25,000 plus HST, and frequently impose conditions: developer consent, no public marketing, restrictions on advertising, and a deadline (often 60 to 90 days before final closing). If assignment is allowed and the unit has appreciated, the assignor may sell their interest in the agreement to a buyer who closes with the developer at final closing. Tax implications are real. CRA may treat profit on assignment as business income (fully taxable) rather than a capital gain, and HST treatment differs depending on whether the assignor is the end-user or a flipper. Get a tax accountant involved before listing an assignment.

On a new Ontario condo or freehold home, HST is 13% (5% federal + 8% provincial). For owner-occupiers, the federal rebate refunds 36% of the 5% federal portion up to about $6,300, phasing out between purchase prices of $350,000 and $450,000, which means very few GTA buyers see the full federal rebate. The Ontario provincial rebate refunds 75% of the 8% portion up to $24,000 with no income test, available on virtually every GTA new-build. If you do not move in personally and instead rent the unit out, you cannot use the new-home rebate. Investors instead apply for the New Residential Rental Property (NRRP) rebate by filing within two years of closing, supplying a one-year lease, and meeting CRA's primary-residence test for the tenant.

Beyond the purchase price, GTA pre-construction closing costs commonly include: capped or uncapped development charges and education levies (often $15,000 to $40,000+ on a Toronto condo), Tarion warranty enrolment fees, utility connection fees, occupancy fee reconciliation, land transfer tax (Toronto charges both Ontario and Toronto LTT, so be aware of the doubled bill), legal fees, status certificate fee, and HST on assignment if applicable. Negotiate caps on the development-charge passthrough during the 10-day cooling-off period. Uncapped passthroughs are the single biggest closing surprise on Toronto condos.