Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
What's Your Unit Worth Right Now?
Get a free AI-powered price range for your condo in under 90 seconds — floor, exposure, view, parking and locker included. No name or address required.
Get My Free Estimate →The market itself is the first risk. In Q1 2026 the GTHA recorded zero new condominium project launches, new condo sales of 246 units (down 52% year over year, 94% below the ten-year average), and a record 4,295 completed but unsold units with 8,629 more unsold under construction. New construction averaged $1,189 per square foot against $859 in resale — a record 38% gap.
The specific risks in a pre-construction agreement are: the 10-day rescission window that closes and does not reopen, HST that applies to a new home with no rebate at luxury prices, HST on the entire price of an assignment since 7 May 2022, the residential property flipping rule for anything held under 365 days, occupancy fees before final closing, and Tarion coverage caps far below the value of a top-end unit.
Risk one: the market you are buying into
| Q1 2026, GTHA new condominium market | Figure |
|---|---|
| New project launches | Zero — first quarter in 30 years with none |
| New condo sales | 246 units, down 52% year over year |
| Versus the 10-year average | 94% below |
| Completed but unsold inventory | 4,295 units — a record |
| Unsold units still under construction | 8,629 |
| New construction price | $1,189 per sq ft |
| Resale price | $859 per sq ft |
| Gap | 38% — a record |
Read the last three rows together. You are being asked to pay 38% more per square foot than the same space costs in an existing building, in exchange for a unit that does not exist yet.
Risk two: the ten days, and what happens after
Under the Condominium Act, 1998 you have a 10-day rescission right on a pre-construction purchase, running from the later of receiving the fully signed agreement of purchase and sale or receiving the developer’s disclosure statement. Within those ten days you may cancel for any reason and receive your deposit back in full.
After the tenth day, you are bound to a contract drafted entirely by the vendor. Since 6 August 2025 an expanded Condominium Buyer’s Guide must be attached to pre-construction agreements, which helps — but nothing replaces having a lawyer read the actual agreement inside the window.
Risk three: the tax treatment
- HST applies to a newly constructed home from a builder. The federal new housing rebate phases out entirely at $450,000; the Ontario portion caps at $24,000. At luxury prices there is effectively no rebate.
- The new First-Time Home Buyers’ GST rebate (agreements from 27 May 2025) gives 100% relief up to $1,000,000, phasing linearly to nil at $1,500,000. Irrelevant above that.
- Assignments are fully taxable. Since 7 May 2022, GST/HST applies to the entire assignment price on new housing, including any deposit recovered from the builder, whether or not itemised separately.
- The residential property flipping rule applies to dispositions on or after 1 January 2023. Own a housing unit for fewer than 365 consecutive days and the gain is generally taxed as business income at full inclusion, with the principal residence exemption denied, unless a listed life event applies.
Risk four: interim occupancy
In a condominium you typically move in before the corporation is registered and before final closing. During interim occupancy you pay a monthly occupancy fee to the builder. It is not rent in the ordinary sense and it does not reduce your purchase price. On a project with a long registration timeline, it is a meaningful sum paid for nothing you keep.
Risk five: what Tarion actually covers
- Deposits. Condominium deposits must be held in trust under the Condominium Act, which is a real protection.
- Delayed occupancy. $150 per day for living expenses, to a maximum of $7,500.
- Warranty caps. For agreements signed on or after 1 July 2023: $300,000 aggregate for a condominium unit, and up to $3.5 million for common elements.
On a $4 million unit, a $300,000 aggregate cap covers 7.5% of what you paid. Tarion is a floor, not insurance.
Risk six: everything else about a unit that does not exist
- Final square footage and ceiling heights that differ from the brochure within permitted tolerances
- Finishes substituted for equivalents at the builder’s discretion
- Views that change as the surrounding sites develop
- Development charges and levies passed through at closing, often capped but rarely at zero
- Completion timelines that extend, sometimes by years
- The financial condition of the developer over a multi-year build
The practical takeaway
In a market with a record 4,295 completed unsold units and a 38% new-versus-resale price gap, the honest question is what pre-construction is buying you that a completed unit is not. Sometimes the answer is genuine — a specific building, a specific floor plan, current construction standards. Often it is not. Get the agreement to a lawyer inside the ten days, and price the HST, the occupancy fees and the Tarion caps before you decide.
Frequently asked questions
What is the 10-day rescission right on a pre-construction condo?
Under the Condominium Act, 1998, a buyer may cancel a pre-construction condominium purchase for any reason within 10 days, running from the later of receiving the fully signed agreement of purchase and sale or receiving the developer’s disclosure statement. The deposit is refunded in full. After the tenth day the agreement is binding.
Is pre-construction cheaper than resale right now?
No. In Q1 2026 new construction averaged $1,189 per square foot while resale averaged $859 — a record 38% gap. You are paying a premium for warranty coverage, current building standards and choice of finishes, not for price.
Do I pay HST on a pre-construction condo?
GST/HST applies to a newly constructed home sold by a builder. The federal new housing rebate phases out entirely at $450,000 and the Ontario portion caps at a $24,000 maximum, so at luxury prices there is no meaningful rebate. The 2025 first-time home buyers’ GST rebate is nil at or above $1,500,000.
What happens if I assign my pre-construction contract?
Since 7 May 2022, GST/HST applies to the entire assignment price on assignments of new housing, including any deposit recovered from the builder, whether or not it is itemised separately. Assignment also requires the builder’s consent under most agreements, and is often restricted or charged for.
What does Tarion actually cover on a condominium?
Condominium deposits must be held in trust under the Condominium Act. Delayed occupancy compensation is $150 per day to a maximum of $7,500. For agreements signed on or after 1 July 2023 the aggregate warranty cap is $300,000 for a condominium unit and up to $3.5 million for common elements. On a multi-million dollar unit those caps cover a fraction of the value.
What are occupancy fees?
In a condominium you typically take occupancy before the corporation is registered and final closing occurs. During that interim occupancy period you pay a monthly occupancy fee to the builder which does not reduce your purchase price. On a long registration timeline this can be a substantial sum.
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.
connect@jatindua.com · 437-987-1925 · Book a free consultation
Confidential. Read personally and answered within 24 hours. I never share, sell or distribute your information.
Related reading
- Assignment sales in Toronto: the HST trap and the flipping rule
- Your 10-day rescission right on a pre-construction purchase
- Tarion warranty on a luxury new build: the limits that surprise people
- The Toronto luxury condo market in 2026: two markets in one city
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
- Real Estate Magazine — No new condo projects launched in Q1 2026 (Urbanation data)
- Canada Revenue Agency — GST/HST on assignments of new housing (GI-120)
- Tarion — Coverage for closing dates and delays
- Department of Finance Canada — First-Time Home Buyers’ GST rebate
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.