How a builder closing differs from a resale closing: interim occupancy, the HST rebates, the Tarion warranty and the adjustments that surprise buyers.
⚖️ This is general information, not legal advice. It can't account for your specific situation. Use it to get oriented, then confirm the details with a licensed Ontario lawyer.
Buying from a builder is a different transaction from buying a resale home. The contract is the builder's own, the price carries HST, the closing may happen in two stages, and a statutory warranty backed by Tarion takes the place of the seller's promises about condition. This guide walks through the stages in the order they happen, from the agreement to the year-end warranty form, and points to the primary sources so you can check the current figures yourself. It is written for freehold homes and condominium units alike; where the rules differ, we say so.
Before you sign: licence, addendum and lawyer review
Every builder and vendor of a new home in Ontario must be licensed by the Home Construction Regulatory Authority, and every new home must be enrolled with Tarion. Check both in the Ontario Builder Directory before you pay a deposit.
The builder's agreement must include the Tarion addendum, which sets out the critical dates (tentative and firm occupancy or closing dates, the outside date, and the compensation that applies if the builder misses them). The addendum cannot be waived. For a condominium bought from the declarant, the Condominium Act, 1998 gives you ten days to rescind after you receive the disclosure statement, the condominium guide and the signed agreement. Freehold homes have no equivalent statutory cooling-off period, so have the agreement reviewed before you sign it.
Deposits and delays
Deposits paid to a builder are protected in two ways: the builder must hold them as the Act and regulations require, and if the builder fails, section 14 of the Ontario New Home Warranties Plan Act entitles the purchaser to compensation from the warranty fund up to the limits Tarion publishes for freehold and condominium homes.
If the builder delays past the dates in the addendum without proper notice, the delayed closing or delayed occupancy warranty under O. Reg. 165/08 provides compensation up to a cap. Keep a file of every notice the builder sends; the notice periods decide what you can claim.
Interim occupancy (condominiums)
A condominium unit can be occupied before the condominium is registered and before you receive a deed. During interim occupancy you pay the declarant a monthly occupancy fee that section 80(4) of the Condominium Act caps at three components: interest on the unpaid balance of the price at the prescribed rate, an estimate of municipal taxes for the unit, and the projected common expense contribution. None of it reduces the price. You may elect to pay the balance in full at occupancy to avoid the interest portion. Final closing, when title transfers and your mortgage is registered, follows registration of the condominium.
HST and the rebates
New homes are subject to HST; resale homes generally are not. Two rebates reduce the cost when the home will be your or a relation's primary place of residence: the GST/HST new housing rebate on the federal portion, which phases out above a fair-market-value threshold, and the Ontario new housing rebate on the provincial portion, up to a cap. Builders usually take an assignment of both rebates and quote a price net of them; the agreement will require you to repay the rebate if you do not move in or you resell before occupying. 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. Check the current conditions there; the figures change.
The pre-delivery inspection
Before you take possession the builder must walk you through the home for a pre-delivery inspection and record incomplete or damaged items on the Tarion PDI form. Everything you note is evidence for later claims; items missed at the PDI can still be claimed within the warranty periods, but it is harder to show they were not caused after possession. You may bring a home inspector or a knowledgeable friend.
Closing adjustments to expect
- Development and education levies, unless the agreement caps them: ask for the cap in writing before signing.
- Utility and water meter installation charges, tree planting, driveway paving and similar items listed in the builder's schedule.
- The Tarion enrolment fee, often passed to the buyer.
- HST on upgrades and on any adjustment the builder charges, where the agreement says so.
- Property taxes: the first bills may reflect land only; a supplementary assessment for the house arrives later, sometimes as a large catch-up bill.
After you move in: the warranty clock
Under section 13 of the Ontario New Home Warranties Plan Act the vendor warrants that the home is built in a workmanlike manner, free of defects in material, fit for habitation, built to the Ontario Building Code and free of major structural defects. Tarion administers that warranty in one-, two- and seven-year periods, each covering specific items. Two forms drive the first year: the 30-day form, submitted within the first thirty days after possession, and the year-end form, submitted in the last thirty days of the first year. Miss those windows and the items in them may fall outside coverage.
How Treadstone Law can help
A builder closing rewards preparation: knowing the critical dates, budgeting for the adjustments and filing the Tarion forms on time. We review builder agreements before signing and handle both interim and final closings for a published flat fee.
Treadstone Law handles real estate matters on a transparent flat fee, with online intake and a real lawyer on your file, across Ontario.
- Start your file online at treadstonelaw.ca/start-file
- See flat-fee pricing at treadstonelaw.ca/pricing
- Learn more about our real estate services at treadstonelaw.ca/real-estate
- Or call us: 1-844-900-1070
This is not legal advice
This guide is general information, not legal advice. Reading it does not create a lawyer-client relationship. Ontario laws and government programs change, and how the law applies depends on your specific facts. For advice about your situation, speak with a licensed Ontario lawyer. Treadstone Law is licensed by the Law Society of Ontario — reach us at 1-844-900-1070 or start a file online.