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Pre-Construction Homes and Condos in Ontario: Straight Answers (2026)

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Deposits, Tarion protection, cooling-off rights, occupancy fees, assignments, HST rebates and what happens when a project is delayed or cancelled — for buyers of new condos and freehold homes in Ontario.

19 questions · Last reviewed October 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty

Before you sign

Is there a cooling-off period on a pre-construction condo in Ontario?

Yes. Under the Condominium Act you can cancel within 10 days of the latest of receiving the executed agreement, the disclosure statement and the condominium guide, and get your deposit back. A further 10-day right applies if the builder later discloses a material change.

Full guide: Pre-construction condos and TarionTry it: Pre-construction hub

Last reviewed October 2026 · Jatin Dua, Broker of Record

Is there a cooling-off period on a new freehold home in Ontario?

Not yet. A 10-day cooling-off period for new freehold homes is in the New Home Construction Licensing Act and is scheduled to take effect on 1 January 2027; until then, a signed freehold agreement binds the buyer unless the contract itself allows cancellation. The start date has been delayed before, so check it before you sign.

Full guide: Cooling-off for freehold new homes

Last reviewed October 2026 · Jatin Dua, Broker of Record

How do I check a builder before buying pre-construction in Ontario?

Look the builder up in the Home Construction Regulatory Authority’s Ontario Builder Directory, which shows its licence status, past projects, warranty claims and any convictions or conditions. Then check the vendor named in the agreement, which is often a separate company from the brand on the sales centre.

Full guide: How to check a builderTry it: Check your builder

Last reviewed October 2026 · Jatin Dua, Broker of Record

How much deposit do you need for a pre-construction condo in Toronto?

It is set by each builder, but GTA condo deposits commonly total 15% to 20% of the price, paid in instalments over the first year or two after signing. Freehold builders often ask for fixed amounts. The deposit schedule is negotiable, especially in a slow market.

Full guide: Pre-construction projects in EtobicokeTry it: Pre-construction hub

Last reviewed October 2026 · Jatin Dua, Broker of Record

Is pre-construction a good investment in 2026?

It is much riskier than it was. In Q1 2026 there were no new GTHA condo launches and a record of more than 4,000 unsold completed units, and new condos were selling at a large premium per square foot over resale. Buy pre-construction to live in, with deposit money you can afford to have tied up for years, not on an assumption of price growth.

Full guide: New construction vs resale

Last reviewed October 2026 · Jatin Dua, Broker of Record

Deposit protection and Tarion

How much of my deposit does Tarion protect?

For a condominium unit, up to $20,000. For a freehold home, up to $60,000 if the price is $600,000 or less, or 10% of the price to a maximum of $100,000 above that. Since 2018 payments for upgrades and extras are covered too. Anything above those limits is at risk if the builder fails.

Full guide: Tarion deposit protection

Last reviewed October 2026 · Jatin Dua, Broker of Record

What is the Tarion 45-day notice?

Since 1 April 2026, buyers of new homes must notify Tarion of their purchase within 45 days of signing the agreement. From 1 January 2027, freehold buyers who miss the deadline lose full deposit coverage and fall into a capped special fund instead — so register with Tarion as soon as you sign.

Full guide: The Tarion 45-day notice

Last reviewed October 2026 · Jatin Dua, Broker of Record

Are condo deposits held in trust in Ontario?

Yes. Under the Condominium Act, condo deposits must be held in trust or secured by deposit insurance, and the first $20,000 is also covered by Tarion. Ask the builder how deposits above that are protected.

Full guide: Deposit protection if a builder fails

Last reviewed October 2026 · Jatin Dua, Broker of Record

What happens to my deposit if the builder goes bankrupt?

You claim the protected portion through Tarion and, for condos, through the trust or deposit insurance. Anything above the protected amounts becomes a claim in the insolvency, where recovery is uncertain and slow.

Full guide: Builder insolvency and your deposit

Last reviewed October 2026 · Jatin Dua, Broker of Record

What happens if a condo project is cancelled?

If the builder terminates under a condition in the agreement — for example, not reaching sales or financing targets by a set date — deposits are returned, usually with interest required by law. Buyers do not get the property or any increase in value they expected.

Full guide: When a GTA condo project is cancelled

Last reviewed October 2026 · Jatin Dua, Broker of Record

What if my new home’s closing is delayed?

Every Ontario new-home agreement must include Tarion’s Addendum, which sets firm and outside closing dates, limits how the builder can extend them, and requires compensation to the buyer for unauthorized delays. Read the critical dates in the Addendum before you sign.

Full guide: Builder delays and cancelled projects

Last reviewed October 2026 · Jatin Dua, Broker of Record

Occupancy, closing and taxes

What is interim occupancy in a new condo?

It is the period when you can move into your unit before the condominium is registered. You pay the builder a monthly occupancy fee made up of interest on the unpaid balance, estimated property tax and common expenses; it builds no equity and lasts until registration and final closing.

Full guide: Interim occupancy fees explained

Last reviewed October 2026 · Jatin Dua, Broker of Record

What if the appraisal at final closing is below my purchase price?

Your lender lends on the lower of the price and the appraised value, so you have to make up the gap in cash. On condos bought at the peak and closing in 2025 and 2026, that gap has been a real problem; plan for it well before final closing.

Full guide: The appraisal gap at final closing

Last reviewed October 2026 · Jatin Dua, Broker of Record

Do I get an HST rebate on a new home in Ontario?

Usually yes. There is the federal First-Time Home Buyers’ GST Rebate (up to $50,000 on homes up to $1 million), the Ontario New Housing Rebate (up to $24,000) and, for agreements signed between 1 April 2026 and 31 March 2027, the Ontario Enhanced New Housing Rebate (up to $80,000). Most builders credit the rebates on the statement of adjustments.

Full guide: Ontario HST rebates on new homesTry it: HST relief checker

Last reviewed October 2026 · Jatin Dua, Broker of Record

What closing costs come with a pre-construction home?

Land transfer tax, legal fees, and the adjustments the agreement allows the builder to charge — often development charge increases, utility connection fees, Tarion enrolment and education levies. Many buyers negotiate a cap on these adjustments before signing.

Full guide: Pre-construction closing costs

Last reviewed October 2026 · Jatin Dua, Broker of Record

What is a pre-delivery inspection (PDI)?

It is the walkthrough with the builder before you take possession, where you record visible defects and incomplete work on Tarion’s form. Anything listed becomes part of your warranty record, so be thorough and bring a checklist.

Full guide: The pre-delivery inspection

Last reviewed October 2026 · Jatin Dua, Broker of Record

Assignments

Can I sell my pre-construction condo before closing?

Yes, by assignment, if the builder consents — most agreements require consent and charge a fee, and some prohibit public marketing on MLS. The buyer takes over your agreement and pays you back your deposit plus any profit.

Full guide: Assignment sales guide

Last reviewed October 2026 · Jatin Dua, Broker of Record

Do you pay HST on an assignment sale?

Often yes: the CRA generally treats the profit on an assignment of a new residential property as taxable for HST, and profits may be fully taxable as business income. Get tax advice before you sign an assignment.

Full guide: Assignment sales, HST and land transfer tax

Last reviewed October 2026 · Jatin Dua, Broker of Record

Can I assign a freehold pre-construction home?

Usually, with the builder’s consent, on the same principles as a condo assignment, though freehold builders often restrict assignments more tightly until a set stage of construction. Check the assignment clause before you buy.

Full guide: Assigning a freehold pre-construction home

Last reviewed October 2026 · Jatin Dua, Broker of Record

Didn’t find your question?

Ask me directly and I’ll answer it properly — including when the honest answer is to wait. Call or text 833-330-1925, book a 15-minute call, or try Ask JD, the AI concierge on this site.

Jatin Dua · Broker of Record · RE/MAX Quantum Realty · Toronto and the GTA

General information, current as of October 2026. Not legal, tax, accounting or mortgage advice. Rules, rates and program terms change; confirm your own numbers with your lawyer, accountant and lender before you rely on them. Market figures are averages or medians across whole areas, not any one home. Commission is negotiable and nothing here is a quote. Jatin Dua, Broker of Record, RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. Each office independently owned and operated. Not intended to solicit buyers or sellers currently under contract with another brokerage. E. & O.E.

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