How is my deposit protected when I buy a pre-construction home in Ontario?

When you buy a new home or condo from a registered builder in Ontario, your deposit is protected under the New Home Warranties Plan Act through Tarion. Tarion provides deposit protection up to prescribed limits — currently up to $60,000 for a freehold home priced at $600,000 or less (10% of the price to a maximum of $100,000 above that), and up to $20,000 for a condominium unit — confirm the current limits at tarion.com, as they can be updated.

This protection applies if the builder fails to complete the home, fails to deliver possession, or becomes insolvent. You must have purchased from a builder licensed by the Home Construction Regulatory Authority (HCRA), which has regulated builder and vendor licensing since 2021; buying from an unlicensed builder puts this protection at risk, which is one reason to verify the licence before signing anything.

For condo purchases specifically, the Condominium Act also requires deposits to be held in trust until occupancy or return, providing an additional layer of security.

To make a deposit protection claim, you file with Tarion within specified limitation periods. Keep all receipts and records of every deposit payment made. If you're purchasing at the higher end of the market or paying deposits above the protection limits, discuss additional strategies — such as escrow arrangements or staged payments — with your lawyer before signing.