How is the occupancy fee calculated during the interim period of a new condo?

The occupancy fee you pay during the interim occupancy period of a new condo is calculated based on three components as set out in the Condominium Act.

The first component is an amount equal to interest on the unpaid balance of the purchase price. The interest rate used is the prescribed rate under the legislation — not your personal mortgage rate. For the balance calculation, any deposits you have already paid reduce the principal on which interest is charged.

The second component is your estimated monthly share of the common expenses for the condominium corporation. This is based on the builder's projected budget for the first year of operation.

The third component is your estimated monthly property tax for the unit. Since the municipality bills property tax to the builder during the construction phase, the builder passes the estimated unit share to you.

The total of these three amounts forms your monthly occupancy fee. It is paid to the builder, not to a lender or municipality. It does not reduce your purchase price or build equity — it is purely a cost of occupying the unit while the condo project goes through the registration process.

If the interim period extends for many months, the cumulative occupancy fees can represent a significant additional cost on top of your existing housing costs. Budget for this overlap carefully and discuss the anticipated length of the interim period with the builder before closing.