Pre-Construction Guide

Buying pre-construction means you sign an agreement for a home that is not built yet. It can offer a long timeline to save and the chance to choose finishes, but it also means a long wait, a price fixed years before you move in, and a thick agreement. This guide walks through the stages in the order they happen.

1. Research the project and the builder

Before you look at floor plans, look at who is building.

• Builder track record. Look for completed projects, delivered on time, and how owners describe the experience after moving in.
• Licensing and registration. Ask whether the builder is licensed and registered with Ontario’s new-home regulators, and check the public registers rather than taking someone’s word for it.
• Project status. Has the land been secured? Are approvals in place? Has construction started? Projects can be delayed or cancelled, and the earlier the stage, the more uncertainty there is.
• Location over time. Visit the area, check the transit and amenity plans, and think about what the neighbourhood will look like in 3 to 5 years, not today.

2. Understand the agreement before you sign

The agreement of purchase and sale for a new home is long, and most of it is written by the builder. Have a real estate lawyer review it before you sign, not after. Pay attention to:

• The price and what it includes. Does it include HST and any rebates? What is excluded?
• Deposit schedule. When each payment is due and how much.
• Closing and occupancy dates. Many agreements allow the builder to move dates, and the agreement sets out when and by how much. This is one of the most important sections.
• What extra charges will be added at closing. Examples include development charges and levies, utility connections, and other adjustments. Ask for a written estimate.
• Upgrades and selections. What is included, what costs extra, and by when you must choose.
• Right to assign. Some builders restrict or charge for transferring the agreement to someone else.
• Termination rights. What happens if the builder cannot complete, or if the project is cancelled.

3. Cooling-off period for condos

For a pre-construction condo, the buyer has a 10-day cooling-off period in which they may rescind (cancel) the agreement. The period starts after you receive the signed agreement, the builder’s disclosure statement, and the Residential Condominium Buyers’ Guide. The agreement is not binding on you until those documents have been delivered. Read the disclosure statement carefully during this window, and have your lawyer review the whole package.

Verified on 4 October 2026 against the Condo Authority of Ontario.

4. Deposits and how they are protected

Deposits are usually paid in stages. Where they go and how they are protected depends on the type of home:

• Condos: funds received by the builder generally must be held in trust. Tarion protects deposits and other payments up to a maximum of $20,000.
• Freehold homes (houses, towns): Tarion deposit coverage, for agreements signed since January 1, 2018, is up to $60,000 if the price is $600,000 or less, and 10% of the price up to a maximum of $100,000 above that. This includes money put toward upgrades and extras. Tarion’s site also describes a registration timing requirement for freehold deposit coverage that takes effect on January 1, 2027, so check its page and register your purchase agreement promptly.

Deposit protection applies in specific circumstances, such as the builder going bankrupt or a fundamental breach, so it does not replace reading the agreement.

Verified on 4 October 2026 against Tarion’s deposit protection page.

5. Selections and upgrades

You will usually meet the builder’s design team to choose finishes, such as flooring, kitchen, countertops, and electrical. Plan ahead:

• Know your deadlines. Missing a selection date can mean the builder picks for you.
• Get the price of every upgrade in writing before you commit.
• Check whether upgrade payments count toward Tarion deposit protection. For freehold homes, Tarion says protection includes money put toward upgrades and extras.
• Keep copies of everything you choose and pay for.

6. Waiting for construction

During construction, stay in touch with the builder or sales office and keep an eye on:

• Milestones and any notice of a change in the closing date
• Your financing. A mortgage approval or rate from years ago may not hold, so revisit your finances well before closing.
• Your own circumstances. Income, credit and family size can change over a multi-year wait.

7. Occupancy and closing

For condos, there is usually an interim occupancy period. You move in before the building is registered, and you pay occupancy fees (often close to what your mortgage and fees will be) instead of a mortgage payment. After the condo is registered, the final closing happens and the title transfers to you. For freehold homes, closing and possession are usually closer together.

In the lead-up:

• Pre-delivery inspection (PDI). Your builder must do one with you before you take possession. Use it. Write down everything that is damaged, missing, incomplete or not working, and take photos. You can bring someone knowledgeable to help.
• Closing costs. Arrange funds for the balance due and the extra charges in the agreement. See the Mortgage & Closing Costs Guide.
• Financing. Confirm your mortgage is in place.

8. After you move in: the new-home warranty

Tarion’s warranty is provided by your builder and backed by Tarion. According to Tarion’s information sheet for freehold homes, it starts on your occupancy date and covers up to $400,000. Its main periods are:

• One year: the home is built in a workmanlike manner, free of defects in material, fit for habitation, and compliant with the Building Code
• Two years: water penetration in the basement, foundation and building envelope; defects in electrical, plumbing and heating distribution systems; exterior cladding; and Building Code violations affecting health and safety
• Seven years: defects in a structural load-bearing element that cause structural failure or materially affect the home’s structural integrity or the use of a significant part of it

The warranty is limited, and the information sheet lists exclusions such as normal wear and tear and damage from improper maintenance. Register on Tarion’s MyHome portal after you take possession so you can submit claims and track the dates. Delayed closing coverage, up to $7,500, may also be available when a builder misses an allowable closing date.

Verified on 4 October 2026 against Tarion’s freehold warranty information sheet, effective May 1, 2024. Condominium warranties differ in some details, so check Tarion for your type of home.

9. Possible federal tax relief for first-time buyers

The federal first-time home buyers’ GST/HST rebate removes 100% of the GST on a new or substantially renovated home valued up to $1 million, and gives a partial rebate between $1 million and $1.5 million. It follows the eligibility rules of the existing GST/HST new housing rebate. Check the Canada Revenue Agency page for who can apply and the dates the rebate applies to, and ask your lawyer how it is handled on your closing.

Questions to ask before you sign

• What are the exact closing and occupancy dates, and what happens if they move?
• What extra charges will I pay on closing, and can I get an estimate in writing?
• What happens to my deposit if the project is cancelled or delayed?
• What are the builder’s rules on assigning the agreement?
• Can I afford the occupancy fees and the final mortgage, even if rates change?
• Have I had a lawyer review everything, and did I give myself time?