Buying Pre-Construction in the GTA (2026): Deposits, Closing Costs & Risks Explained

Pre-construction homes in Brampton, Mississauga, Vaughan and across the GTA can look like a bargain on paper: a lower entry price, a staggered deposit schedule and a brand-new home years from now. But the contract you sign is very different from a resale purchase. This guide walks through how pre-construction works in Ontario, what to read before you sign, and the costs that surprise first-time buyers.

How a pre-construction purchase works in Ontario

You buy directly from a builder (or through the builder's sales team) before the home is built or while it is under construction. You sign an Agreement of Purchase and Sale drafted by the builder's lawyers, pay deposits in instalments, and close months or years later once the home is ready for occupancy and registered.

The typical timeline

• Signing: an initial deposit is due with the agreement, followed by further instalments on dates set in the contract.
• Construction: you wait, and the builder issues notices about the project's progress.
• Occupancy / closing: for condos there is usually an interim occupancy period before final closing; for freehold homes you typically close shortly after the home is complete.

Deposits: what to ask before you sign

Deposit structures vary by builder and project. Ask for the full deposit schedule in writing, confirm where deposits are held (in trust), and ask how they are protected if the project does not proceed. Ontario's new-home warranty provider, Tarion, offers deposit protection for eligible purchases; confirm the current coverage limits directly with Tarion and with your lawyer rather than relying on a sales brochure.

The costs beyond the purchase price

The sticker price is rarely the final price. Build a budget that includes:

• Development charges, levies and tax adjustments that builders often pass on at closing.
• HST on new homes (the price may be quoted with HST included or extra, so check, and ask whether any rebate assignment is required).
• Land transfer tax (and Toronto's municipal land transfer tax if the home is in Toronto).
• Legal fees, title insurance and utility connection or meter fees.
• Upgrades and finishing such as flooring, window coverings and appliances that may not be included.
• Parking and locker fees for condos, plus ongoing maintenance fees after occupancy.

Risks to understand

Delays

Closing dates are often estimates. Review the contract's tentative occupancy date, the builder's right to extend it, and what remedies you have if it slips far beyond the original date. Ontario's rules around delayed closings are specific, so have a lawyer explain your rights.

Appraisal gaps and financing

Your price is fixed at signing, but the market keeps moving. If values soften before closing, the lender's appraisal may come in below your purchase price, and you would need to cover the gap. Talk to a mortgage professional early, and remember that a mortgage pre-approval at signing may not hold years later.

Assignments

Many builders restrict or charge a fee for assigning (reselling) your agreement before closing. Never count on being able to flip a contract; read the assignment clause carefully.

Cancelled or changed projects

Builders can sometimes amend plans, finishes or unit sizes within limits set in the agreement. Ask what changes are permitted and what happens to your deposit if the project is cancelled.

Pre-construction vs resale: which fits you?

Pre-construction can suit buyers who want a new home, can wait, and can handle deposit instalments. Resale suits buyers who need a home sooner, want to see exactly what they are buying, and want to negotiate with known comparables. If you are weighing both, look at what similar homes actually sold for in the neighbourhood you are considering: see our guides for Brampton, Mississauga and Vaughan.

A checklist before you sign

• Have a real estate lawyer review the agreement before you sign, or within any cooling-off period that applies (for example, Ontario condo purchases from a builder have a statutory cooling-off period; confirm details with your lawyer).
• Get the full, itemized list of closing costs and adjustments in writing.
• Confirm the builder's track record and Tarion registration.
• Understand your financing plan, including what happens if the appraisal is short.
• Compare the price per square foot against nearby resale and other new projects.

Talk to a local REALTOR®

I'm Ishaan Verma, a REALTOR® with Royal LePage Certified Realty serving the GTA. If you're deciding between pre-construction and resale, I can pull recent sold comparables and help you read the numbers before you commit. Start with our buyer resources, or if you own a home and are planning your next move, see how to sell your home. This article is general information, not legal or financial advice; confirm specifics with your lawyer, lender and the builder's documents.