Ontario Pre-Construction Closing Costs: A Buyer Guide
Plan taxes, legal fees, builder adjustments, rebate conditions and occupancy costs with a worked Ontario example.
5 min read · Reviewed 2026-10-07
Pre-construction closing costs are the funds beyond your deposit and mortgage down payment needed to complete an Ontario new-home purchase. The total depends on the agreement, location, ownership structure and rebate eligibility. Use an itemized worksheet instead of assuming one percentage covers every project. Ask your lawyer to review adjustment clauses before signing, while there is still time to request changes.
Build the closing worksheet
| Budget line | What to confirm |
|---|---|
| Purchase price | Model, lot, premiums, upgrades and rebates |
| Deposit paid | Receipts and purchase-price credit |
| Mortgage advance | Net funds the lender will provide |
| Land transfer tax | Provincial and applicable municipal calculations |
| Legal costs | Fees, registration and disbursements |
| Builder adjustments | Exact contractual clauses and caps |
| Other cash | Insurance tax, moving and housing overlap |
Ontario land transfer tax: a $600,000 example
Ontario’s standard residential brackets produce $8,475 of provincial land transfer tax on $600,000 of taxable consideration, before any eligible refund. Your lawyer confirms the taxable amount and eligibility. A Toronto purchase can also attract municipal land transfer tax, which this example excludes. A rebate for another tax is not an automatic reduction in land transfer tax.
Read the adjustment clauses
Ask which charges the agreement transfers to you: development-related adjustments, utilities or meters, warranty enrolment, taxes and other fees. A cap can cover one category while leaving another uncapped, indexed or subject to tax. Obtain the written wording and a sample closing statement. The worksheet should show confirmed figures separately from allowances still awaiting an answer.
Avoid counting a rebate twice
An advertised builder price may already assume an eligible housing rebate. Ask for the gross agreement price, the rebate credited or assigned, and the amount payable if you do not qualify. CRA maintains current guidance for existing rebates, first-time buyer programs and Ontario enhanced measures. Dates, use and other conditions matter; investment purchases need a separate tax review. Budget from the purchase terms instead of the largest advertised rebate.
Allow for occupancy and financing
A new condominium can have interim occupancy before title transfer. Budget its fees and any overlap with your current accommodation. If mortgage default insurance applies, ask which premium is financed and which tax is payable separately. Property tax, common expenses, utilities and moving costs also need room. Update the worksheet as the closing date becomes firmer and confirm how final funds must reach your lawyer through a trusted channel.
Buyer questions
How much are closing costs on every Ontario new home?
There is no reliable single total. Add location-specific taxes, legal costs, agreement adjustments, financing costs and occupancy costs for the actual purchase.
Is the advertised rebate extra money off the price?
It may already be included. Confirm which rebate is credited and what happens if you do not qualify.
Does my deposit pay the closing costs?
It normally credits the purchase price. Plan separate closing-cost funds unless your lawyer confirms otherwise.
Sources
- Ontario — land transfer tax calculation
- CRA — current new housing rebate programs
- Condominium Authority of Ontario — pre-construction purchases
Andy Nagpal · 380 Wellington Street, Tower B, 6th Floor, Suite A, London, ON N6A 5B5 · 548 490 4577
Andy Nagpal is a Real Estate Broker registered with the Real Estate Council of Ontario (RECO) under the Trust in Real Estate Services Act, 2002, trading as eXp Realty, Brokerage. Pre-construction pricing, incentives, deposit structures and availability are set by the builder and are subject to change or withdrawal without notice. E. & O.E. This is not an offer for sale; any such offer can only be made with a builder's disclosure statement and agreement of purchase and sale. Not intended to solicit buyers or sellers currently under contract with another brokerage.