What is the difference between occupancy closing and final closing on a new condo?

New condominiums in Ontario have two closings: an occupancy (interim) closing and a final (title transfer) closing. Understanding both is essential for financial planning.

The occupancy closing is when the builder lets you move in, but you do not yet own the unit — the condo has not been registered with the land registry as a condominium corporation yet. During this interim occupancy period you pay an "occupancy fee" to the builder each month. This fee covers three components: interest on the unpaid balance of your purchase price, your proportionate share of estimated common expenses, and projected property taxes. You do not build equity and your mortgage does not start during this period.

The final closing occurs when the condominium is registered and title transfers to you. At that point your mortgage funds, you pay the balance of the purchase price (adjusted for the Tarion addendum and the Statement of Adjustments), and you become the legal owner.

The interim occupancy period can last anywhere from a few months to over a year depending on how quickly the project registers. Budget for occupancy fees on top of your existing housing costs and talk to your mortgage broker early to ensure your pre-approval remains valid through a potentially extended interim period.