What protects me when I buy a newly built home in Ontario?

The statutory warranty: what the Act says

Section 13(1) of the Ontario New Home Warranties Plan Act makes every vendor warrant that the home is constructed in a workmanlike manner and free from defects in material, is fit for habitation, is built in accordance with the Ontario Building Code, and is free of major structural defects. Section 13(6) says the warranty applies despite any agreement or waiver to the contrary.

Tarion administers the warranty in one-, two- and seven-year periods, each covering specific items, with exclusions for owner-supplied work, normal wear and secondary damage. Claims follow Tarion's forms and timelines, with conciliation and an appeal to the Licence Appeal Tribunal if you disagree with a decision.

Before you move in: deposits and delays

Section 14 entitles a purchaser to compensation from the warranty fund for deposits paid to a vendor that fails, up to the limits Tarion publishes for freehold and condominium homes. The builder must also hold deposits as the Act and regulations require.

If the builder misses the dates in the Tarion addendum without proper notice, the delayed closing or delayed occupancy warranty under O. Reg. 165/08 provides compensation up to a cap. At the outside date you may be able to terminate and recover your deposits with interest. Keep a file of every notice.

HST and the rebates

New homes are taxable. Two rebates reduce the HST when the home will be your or a relation's primary place of residence: the GST/HST new housing rebate on the federal part, which phases out above a fair-market-value threshold, and the Ontario new housing rebate on the provincial part, up to a cap. Builders usually take an assignment of both and quote a price net of them; the agreement will require repayment if you do not move in.

As of September 2026 the CRA guide RC4028 also describes a federal first-time home buyers' GST/HST rebate and time-limited Ontario rebates with agreement-date windows and price limits. Investors who will rent the unit look to the new residential rental property rebate instead. Check the current conditions before signing.

The builder's agreement of purchase and sale

Builders use their own agreement with the mandatory Tarion addendum attached. Read the schedules for adjustments and levies (ask for a cap), upgrade pricing, clauses allowing the builder to substitute materials or change plans, the outside closing date, restrictions on assignment and on for-sale signs, and any clause on the HST rebate. Condominium purchasers have the ten-day rescission right; freehold purchasers have none, so have the agreement reviewed before signing. The pre-delivery inspection, recorded on the Tarion form before possession, is your first warranty document.

Closing on a new build

Condominium units usually close in two stages: interim occupancy, then final closing after registration. Freehold homes close once. The statement of adjustments includes the builder's levies, meter and service charges and the Tarion enrolment fee, and taxes are often adjusted on land only, with a supplementary bill later.

On title we check the subdivision agreement, easements and restrictive covenants that come with a new subdivision, and Planning Act compliance. Holdbacks for deficiencies are rarely permitted by builder agreements; the Tarion process is the route. Once you are in, the 30-day form starts the warranty clock.