Closing on a pre-construction home in Ontario costs more than closing on a resale home, and most of the difference is in charges that are not on the price list. A fair budget is 3 to 5 per cent of the price for a freehold home and more for a condo, where months of occupancy fees are added.
The charges are set out in the agreement you sign at the sales office, usually in a schedule near the back. That means they can be read, questioned and capped before you are committed. This page lists each one, says which are fixed and which are negotiable, and gives you an estimator.
Every charge, in one table
| Charge | What it is | Fixed or negotiable |
|---|---|---|
| Land transfer tax | Ontario tax on the price, plus Toronto’s tax if the home is in the city | Fixed by law |
| Development charges and levies | Municipal, regional and education charges the builder passes on, including increases since you signed | Negotiable. Ask for a cap |
| Tarion enrolment fee | The warranty enrolment fee, set by price | Fixed table |
| Utility meters and connections | Hydro, water and gas meters and hook-ups | Negotiable. Ask for a cap |
| Interim occupancy fees | Monthly fee between moving in and final closing. Condos only | Formula set by law |
| Reserve fund contribution | Often two months of common expenses paid up front. Condos only | Usually fixed |
| Legal fees and title insurance | Your lawyer’s fee, disbursements and title insurance | Shop around |
| Builder’s administrative fees | Charges for discharging the builder’s mortgage, cheques, status certificates and similar | Negotiable |
| Property tax adjustment | Your share of tax the builder has prepaid | Fixed, varies by date |
| HST | Normally built into the price, with conditions | Depends on how you will use the home |
Estimate your own closing
Enter the price and your situation. Land transfer tax and the Tarion fee are calculated for you. The other fields start with typical figures. Replace them with the numbers from your own agreement.
The default is a $700,000 condo in Toronto bought by a first-time buyer, with six months of occupancy. It comes to about $50,100, or 7.2 per cent of the price. Untick Toronto and the total falls by $6,000. The estimator is a planning tool. Your lawyer’s statement of adjustments is the real figure.
Development charges: the one to cap
When a municipality approves new housing it charges the builder for roads, sewers, transit, parks and schools. Most agreements let the builder pass on any increase in those charges between the day you sign and the day you close. On a project that takes four years to build, increases are likely.
Uncapped, this line can run from a few thousand dollars to well over $10,000. It is the largest unknown in a pre-construction purchase, and it is the easiest to fix.
- Ask for a cap in writing. A cap is a dollar ceiling on levies and development charges, added to the agreement as an amendment.
- Ask during the cooling-off period. For a new condo you have ten days after signing to cancel. That is when your lawyer has leverage. Builders routinely agree to caps for buyers who ask.
- Check what the cap covers. Some cover development charges only and leave education levies, parkland charges and community benefit charges open. The wording matters more than the number.
- Cap the meters too. Utility connection and meter charges can usually be capped in the same amendment.
The ten-day cooling-off right applies to new condominiums. Freehold houses and townhouses do not have it unless the agreement says so, so have a lawyer review a freehold agreement before you sign.
Tarion enrolment fee
Every new home in Ontario is enrolled in the Tarion warranty program. The builder pays the fee and recovers it from you on closing. It is set by the price before HST, and 13 per cent HST is added.
| Price before HST | Fee | With HST |
|---|---|---|
| $450,000 to $500,000 | $890 | $1,006 |
| $500,000 to $550,000 | $970 | $1,096 |
| $550,000 to $600,000 | $1,075 | $1,215 |
| $600,000 to $650,000 | $1,515 | $1,712 |
| $650,000 to $700,000 | $1,610 | $1,819 |
| $700,000 to $750,000 | $1,670 | $1,887 |
| $750,000 to $800,000 | $1,740 | $1,966 |
| $800,000 to $850,000 | $1,805 | $2,040 |
| $850,000 to $900,000 | $1,940 | $2,192 |
| $900,000 to $950,000 | $2,010 | $2,271 |
| $950,000 to $1,000,000 | $2,075 | $2,345 |
| $1,000,000 to $1,250,000 | $2,245 | $2,537 |
| $1,250,000 to $1,500,000 | $2,315 | $2,616 |
Tarion fee schedule effective September 1, 2025. Note the jump at $600,000, where the fee rises by $440 for one dollar more in price.
Interim occupancy: the condo cost buyers miss
A new condo closes in two steps. First you get the keys and move in, while the building is still being finished and is not yet registered. Months later, once it is registered, you take title and your mortgage starts.
In between, you pay the builder an occupancy fee every month. Ontario law sets what it can include:
- interest on the unpaid balance of the purchase price, at a rate set by regulation,
- an estimate of the property tax for the unit, and
- the projected monthly common expenses.
None of it reduces what you owe. It works like rent. The period can last a few months or more than a year, and lower floors, which are occupied first, wait the longest.
Three things help. Put more down at occupancy if the agreement allows, since that lowers the interest part. Ask whether you may rent the suite out during occupancy, because many builders forbid it or charge a fee. And keep your mortgage approval current, because the lender will check your finances again at final closing.
Land transfer tax
This is usually the largest single item. On a $700,000 home it is $10,475, and $20,950 in Toronto. First-time buyers get up to $4,000 back from Ontario and up to $4,475 from Toronto. It is paid in cash on final closing and cannot be added to the mortgage.
Our land transfer tax examples work through $600,000, $800,000 and $1 million step by step, and the calculator handles any price.
HST: who it catches
A builder’s price normally includes HST, on the assumption that you or a close relative will live in the home and that the new housing rebate is signed over to the builder.
- If you will live there: nothing extra is normally due.
- If you are buying to rent it out: you do not qualify for that rebate. The builder adds the rebate amount to your closing costs, which can be tens of thousands of dollars. You then apply to the government for the rental rebate yourself, with a one-year lease as proof, and wait for the refund.
- If your plans change before closing: tell your lawyer. Signing the rebate declaration when you do not intend to live there is the mistake that leads to a tax bill later.
The rules were changed in 2026 to give larger relief on new homes. Our HST rebate summary covers what was announced. Confirm with your lawyer how it applies to your agreement and closing date.
Two worked budgets
A $700,000 condo in Toronto, first-time buyer
| Item | Amount |
|---|---|
| Land transfer tax, both taxes, after rebates | $12,475 |
| Tarion enrolment fee with HST | $1,819 |
| Levies and development charges, capped | $12,000 |
| Legal fees and title insurance | $2,500 |
| Meters and other adjustments | $1,500 |
| Interim occupancy, six months at $3,300 | $19,800 |
| Total beyond the deposit | $50,094 |
A $900,000 freehold townhouse in Brampton, first-time buyer
| Item | Amount |
|---|---|
| Land transfer tax after the Ontario rebate | $10,475 |
| Tarion enrolment fee with HST | $2,192 |
| Levies and development charges, capped | $15,000 |
| Legal fees and title insurance | $2,500 |
| Meters and other adjustments | $1,500 |
| Total beyond the deposit | $31,667 |
The land transfer tax and Tarion figures are exact. The levy, legal, meter and occupancy figures are our planning estimates. Yours will be in your agreement and your lawyer’s statement of adjustments.
Charges that do not show up at closing but still cost you
- Upgrades. Chosen at the décor appointment and usually paid then, not on closing.
- Assignment fee. If you sell your contract before closing, the builder may charge several thousand dollars, and its consent is required.
- Appraisal gap. If the home appraises below your price at closing, the lender lends against the lower figure and you make up the difference in cash.
- Things a resale home already has. Window coverings, a driveway and sod on some freehold sites, appliances if they were not included, and a deck or fence.
Questions to put to the sales office
- Will you cap development charges, education levies and parkland charges, and at what amount?
- Will you cap utility meter and connection charges?
- Which administrative fees are in the agreement, and can any be removed?
- What is the estimated monthly occupancy fee for this suite, and how long was occupancy in your last building?
- Is leasing allowed during occupancy?
- What is the assignment fee, and when can I assign?
- Is HST included in the price, and on what conditions?
Get the answers as amendments to the agreement, not as promises. Each project page in our pre-construction list shows the land transfer tax at its starting price and the deposit the builder is asking for.
Questions buyers ask
How much are closing costs on a pre-construction condo in Ontario?
Plan for 6 to 8 per cent of the price in Toronto once occupancy fees are included, and less outside the city. On a $700,000 Toronto condo, our example comes to about $50,100. Our guide to interim occupancy fees explains the largest part of that.
How much are closing costs on a new freehold home?
About 3 to 5 per cent of the price. On a $900,000 townhouse outside Toronto, our example comes to about $31,700.
Can development charges be capped?
Yes. Ask for a cap as an amendment to the agreement, ideally during the ten-day cooling-off period on a condo.
Do I pay land transfer tax at occupancy or final closing?
At final closing, when title transfers to you.
Are occupancy fees part of my mortgage?
No. They are paid to the builder each month and do not reduce the amount you owe.
Is HST included in the price of a new home?
Usually, if you or a close relative will live in it. Investors pay the rebate amount on closing and claim it back afterwards.
Sources and method
- Tarion: enrolment fee schedule effective September 1, 2025.
- Ontario Ministry of Finance and City of Toronto: land transfer tax rates and first-time buyer rebates.
- Ontario Condominium Act: cooling-off period and the components of interim occupancy fees.
- Levy caps, legal fees, meter charges and occupancy fee amounts in the examples are Local Toronto planning estimates.
This page is general information, not legal or tax advice. Have a real estate lawyer review any agreement before you are bound by it. HomeLife Landmark Realty Inc., Brokerage.