New Condo Final Closing Costs in Ontario: The Full List Buyers Miss

Buying a pre-construction condo in Ontario carries a long list of closing costs that resale buyers never encounter. Many buyers budget based on the purchase price alone and are blindsided at final closing by tens of thousands of dollars in adjustments, levies, and government charges. Understanding new condo closing costs before you sign — not the week before closing — lets you plan properly and negotiate where you can.

This article walks through the major categories of closing costs that appear on a typical statement of adjustments for a new Ontario condo. Figures and programs change; confirm every number with your lawyer and the Canada Revenue Agency (CRA) before closing.

Land transfer tax

Like any Ontario real property purchase, you pay provincial land transfer tax (LTT) calculated on the purchase price. If the property is in the City of Toronto, you also pay the municipal land transfer tax. First-time buyers may qualify for rebates on both — verify the current rebate thresholds and eligibility rules with your lawyer or the Ontario Ministry of Finance, as they change.

New condos are not exempt from land transfer tax, and the purchase price used is the price stated in the agreement, not the assessed value.

HST and the new residential rebate

New construction is subject to HST (Harmonized Sales Tax) in Ontario. The HST is embedded in the purchase price on most builder agreements — but there is a critical distinction:

• If you are buying as a primary residence, you (or someone you name) must occupy the unit as a principal place of residence. In that case, the federal and Ontario new residential rental rebates may be assigned to the builder and embedded in your price.
• If you are buying as an investment (rental) property, the rebate does not apply in the same way, and you may owe additional HST at closing or via a CRA filing.

Builder agreements often assume the buyer will use the unit as a principal residence. If you tell the builder at or after closing that the unit is a rental, or if the CRA later determines you did not qualify for the rebate, you may owe back the rebate amount — which can be substantial. As of writing, verify current HST rebate thresholds and conditions with the CRA and your lawyer.

Development charges (levies)

Municipalities charge developers for the cost of new infrastructure — roads, schools, transit, parks — through development charges. Builders routinely pass some or all of these charges on to buyers, and the agreement of purchase and sale typically includes a clause permitting this.

The levies to look for in your agreement

• Educational development charges — passed through from school boards
• Municipal development charges — often the largest line item
• Parkland dedication fees
• Section 37 contributions (or equivalent) — community benefits charges

As of writing, development charge amounts vary by municipality and can be in the thousands to tens of thousands of dollars. The Condominium Act caps the total adjustable levies that can be charged back to buyers — but only up to that cap. Verify the current cap and whether your agreement respects it with your lawyer.

Utility connection fees and meters

New condos often use sub-metering for utilities — electricity, water, gas — and individual meters must be connected at or around closing. These connection charges vary by provider and are typically a few hundred dollars each, but they appear as adjustments on your statement of adjustments.

Some buildings also require buyers to sign up with a specific utility management company. Review any such agreements before signing.

Common expenses adjustment

On final closing, you are adjusted for your share of the common expenses (maintenance fees) from the closing date to the end of the month. This is a standard proration that appears in every condo closing. If interim occupancy fees included an amount for common expenses, your lawyer will trace those payments.

Estoppel certificate fee

On the final closing, the condo corporation (which now exists) issues an estoppel certificate confirming the unit's current status, arrears, and any undisclosed assessments. There is typically a fee for this document — as of writing, a few hundred dollars, but verify. This appears as an adjustment.

Reserve fund contribution

When a new condo closes, the buyer is often required to contribute two months' common expenses to the reserve fund as a start-up contribution. Check your agreement for the specific amount and whether it is included in or in addition to the purchase price.

Legal fees and disbursements

Your own lawyer's fees for the new-condo closing are typically higher than for a resale transaction because:

• The agreement is more complex
• The lawyer must review the disclosure documents, status certificate, and condo rules
• Closings for new condos often involve last-minute adjustments from the builder

At Treadstone Law, we offer flat-fee pricing for new-condo closings so there are no surprises in your legal costs. See our pricing page for current rates.

Title insurance

Title insurance protects against defects in title that would not be discovered even with a thorough search. For new condos, it also provides coverage specific to new construction. Most lenders require it and many buyers obtain owner coverage as well.

Other common adjustments

• Occupancy fee reconciliation — if you paid occupancy fees during the interim period, these are reconciled against any deposit interest the builder owes you (builder agreements vary on this)
• Balance of purchase price — the largest line item; your deposit is credited against this
• Property tax adjustment — if the tax bill has not yet been issued for the new unit, an estimated amount may be used

Frequently asked questions