Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →There is no statutory minimum or maximum deposit on a resale purchase in Ontario. Market practice runs roughly 5% to 10% of the purchase price, and at the top end sellers frequently expect the upper part of that range or more, because a large deposit signals capacity and seriousness. The standard agreement wording is “upon acceptance,” which practice generally treats as within 24 hours.
The money is held in the listing brokerage’s real estate trust account. It is not the brokerage’s money and cannot be used for anything else. If a deal fails, entitlement to the deposit is a civil matter between the parties — and Ontario courts have generally treated a genuine deposit as forfeited to a non-breaching seller, with only limited relief from forfeiture available.
How much
No statute sets a figure. What exists is practice, and practice at the top of the Toronto market runs to the upper end of the usual 5% to 10% range and sometimes beyond it.
| Purchase price | 5% | 10% |
|---|---|---|
| $2,000,000 | $100,000 | $200,000 |
| $3,000,000 | $150,000 | $300,000 |
| $5,000,000 | $250,000 | $500,000 |
The size is negotiable and it is a signal. In a competitive situation, a larger deposit tells a seller two things: the buyer has liquid funds, and the buyer expects to complete. Both matter more at this level than at $900,000, because the consequences of a failed closing are larger and the buyer pool is smaller.
Where the money sits
In the listing brokerage’s real estate trust account. Under TRESA and its regulations, deposits must be held in a segregated trust account. The funds do not belong to the brokerage, cannot be used for its own purposes, and cannot be commingled. This is one of the most heavily supervised aspects of brokerage practice.
The standard agreement wording is that the deposit is delivered “upon acceptance,” which practice generally treats as within 24 hours of the agreement becoming binding. Different timing can be negotiated; read what your agreement actually says.
What happens if the deal fails
This is where expectations and reality diverge most.
Entitlement to a deposit on a failed transaction is a civil dispute between buyer and seller. The brokerage holds the funds and cannot release them without proper authority — typically a mutual release signed by both parties, or a court order.
Ontario courts have generally treated a genuine deposit in a land transaction as forfeited to a non-breaching seller, on the basis that a deposit is security for performance rather than a penalty. Relief from forfeiture is available in limited circumstances under section 98 of the Courts of Justice Act, and the reported cases are fact-specific rather than formulaic.
Deposits and the money-laundering rules
The source of the deposit is part of what a brokerage must consider under FINTRAC obligations. Brokerages must verify identity, keep receipt of funds records, determine beneficial ownership at 25% or more for corporate and trust purchasers, and make a third-party determination about who is directing and funding the transaction. A Large Cash Transaction Report is required for cash of $10,000 or more, and suspicious transaction reporting has no dollar threshold.
Practically: have the funds in place, in an account in your own name, before you offer. Deposits arriving from unexplained third parties cause delays that no amount of goodwill fixes.
Returning a deposit when a condition fails
Where a condition is properly not waived within its time limit and the agreement provides for return of the deposit, the usual mechanism is a mutual release signed by both parties, after which the brokerage releases the funds. Your lawyer should handle the release rather than the parties handling it informally.
The practical takeaway
Treat the deposit as a serious commitment rather than a formality. Have the funds liquid and in your own name before you offer, size it deliberately as part of your negotiating position, and never assume it caps your exposure if you fail to close.
Frequently asked questions
How much deposit is normal in Ontario?
There is no statutory amount. Market practice on resale is roughly 5% to 10% of the purchase price, and at the top of the market sellers often expect the higher end or more. It is negotiable and it is a real signalling tool in a competitive situation.
When is the deposit due?
The standard wording is “upon acceptance,” which is generally treated in practice as within 24 hours of the agreement becoming binding. Read the actual clause in your agreement, since alternative timing can be negotiated.
Who holds my deposit?
It is held in the listing brokerage’s real estate trust account. Under TRESA and its regulations, brokerages must hold deposits in a segregated trust account; the funds do not belong to the brokerage and cannot be used for any other purpose.
What happens to the deposit if I do not close?
Entitlement is a civil dispute between buyer and seller, not something the brokerage or RECO decides. Ontario courts have generally treated a genuine deposit in a land transaction as forfeited to a non-breaching seller, with limited relief from forfeiture available under section 98 of the Courts of Justice Act. A seller may also claim damages beyond the deposit.
Can I get my deposit back if a condition is not met?
If a condition is properly not waived within its time limit and the agreement provides for the deposit to be returned, that is the normal outcome. The mechanics depend on the drafting, and a mutual release is usually required. Your lawyer should handle it.
Does a bigger deposit make my offer stronger?
Frequently yes, particularly at the top of the market. It signals that the buyer has liquidity and intends to complete, and it increases what the seller holds if the buyer does not. In a close competition it can matter as much as the last increment of price.
Thinking about buying or selling at the top end?
Send me the address, or the shortlist you are considering. I will tell you what the property is actually worth today, what the land is worth without the house, what the transfer tax and carrying costs will be, and whether the deal makes sense. Confidential, always.
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Related reading
- Going firm on a $4 million house: the risk nobody prices
- There is no cooling-off period on a resale home in Ontario
- How luxury negotiations actually work in Toronto
- Why your brokerage asks where the money came from
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
- RECO — Information Guide
- McMillan LLP — Court of Appeal on deposit forfeiture
- FINTRAC — Guidance for real estate brokers, agents and developers
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke, and I work with buyers, sellers and investors across Toronto and the west GTA. A large part of my work sits in the upper end of the market, where the comparables are thin, the rules are heavier and the cost of a wrong number is measured in hundreds of thousands of dollars.
The free estimators on this site are mine. I built them because the first question every owner asks is “what is it worth?” and the honest answer starts with a number you can check yourself. connect@jatindua.com or 437-987-1925.