Closing costs on a pre-construction home in Ontario typically add about 3 to 5 percent of the purchase price on top of the price itself, and often more on a condo. The main items are land transfer tax (provincial, plus a second municipal tax in Toronto), development charges and levies, the Tarion enrolment fee, legal fees, title insurance, and prorated adjustments the builder passes to you at closing. Unlike a resale purchase, several of these are set by the builder's contract, which is why the final number surprises buyers who only budgeted for the deposit.
We walk buyers through these numbers before they sign, not after. Here is the full picture with current figures.
Land transfer tax: one tax in Ontario, two in Toronto
Every buyer in Ontario pays provincial land transfer tax when title transfers to them at final closing. The provincial rates are tiered: 0.5% on the first $55,000, 1.0% up to $250,000, 1.5% up to $400,000, and 2.0% above $400,000, rising to 2.5% above $2 million on homes with one or two single-family residences.
Buy inside the City of Toronto and you pay a second, municipal land transfer tax on top, at rates that mirror the provincial brackets for most homes. In effect, Toronto buyers pay land transfer tax twice.
First-time buyers get relief. The provincial refund is up to $4,000, which fully covers the tax on a home up to $368,000. In Toronto, first-time buyers can claim an additional municipal refund of up to $4,475. Both have firm eligibility rules, including that you have never owned a home anywhere in the world.
Development charges, levies, and the cap
This is the pre-construction cost buyers do not see coming. Municipalities charge development charges and education levies on new homes, and builders routinely pass these to the buyer at closing. They are commonly written into the agreement as open-ended, so the number is not fixed when you sign.
These charges can run from a few thousand dollars to well over $10,000. The protection is a cap: a firm ceiling your lawyer negotiates into the contract (for example, levies capped at $12,000). On a condominium, your lawyer usually has a short window after signing to negotiate it, which is one more reason to have a real estate lawyer review the agreement early.
The Tarion enrolment fee
Every new home in Ontario must be enrolled in the Tarion warranty program. The enrolment fee is charged to the builder, but on most pre-construction deals it is passed to the buyer as a closing adjustment. It scales with the price of the home, so a higher-priced home carries a higher enrolment fee. It is usually a few hundred to a couple of thousand dollars.
HST on a new home
HST applies to new homes, but for a home you will live in, the builder almost always builds the new housing rebate into the advertised price, so you do not pay it separately at closing. The picture changes if you are buying to rent it out, or buying on assignment, where the rebate can shift to something you claim yourself. The rules moved in 2026, so treat HST as its own topic and confirm your exact situation. Our new home HST rebate guide walks through the current figures.
Legal fees and title insurance
A pre-construction purchase is more work for your lawyer than a resale, especially a condo, where there are effectively two closings (interim occupancy, then final closing). Expect legal fees higher than a typical resale deal, plus disbursements.
Title insurance is a one-time premium paid at closing that protects your ownership against title fraud and certain defects for as long as you own the home. It is usually a few hundred dollars, based on the property value.
Condo-specific: interim occupancy fees
With a pre-construction condo, there is often a gap between when your unit is ready to live in and when the building is registered and you take title. During that interim occupancy period, you live in the unit and pay the builder a monthly occupancy fee.
That fee is not a mortgage payment and it does not build ownership. It is made up of interest on the unpaid balance of the purchase price, an estimate of property taxes, and an estimate of common expenses. The interim occupancy period can last a few weeks or, on a large high-rise, well over a year, so budget for months of occupancy fees before your real mortgage even starts.
Adjustments and other closing items
At final closing the builder also adds prorated adjustments: your share of property taxes they prepaid, utility meter installation and hookup fees, any assignment or administrative charges in the contract, and sometimes reimbursement of the Tarion enrolment fee noted above. Individually small, together they add up.
A realistic budget
Here is the pattern we give buyers.
| Cost item | Who sets it | Rough guide |
|---|---|---|
| Provincial land transfer tax | Government | Tiered; due at final closing |
| Toronto municipal land transfer tax | City of Toronto | Second tax, Toronto only |
| Development charges and levies | Builder contract | Often thousands; negotiate a cap |
| Tarion enrolment fee | Builder, passed on | Few hundred to a couple thousand |
| Legal fees and disbursements | Your lawyer | Higher than resale |
| Title insurance | Insurer | One-time, a few hundred dollars |
| Interim occupancy fees (condos) | Builder | Monthly, until final closing |
| Adjustments | Builder | Prorated taxes, hookups, admin |
As a rule of thumb, budget about 3 to 5 percent of the price for a freehold home, and more for a condo once levies and occupancy fees are counted. Get the numbers in writing and have your lawyer review them.
Where we fit in
We represent the buyer, never the developer. Before you sign, we read the agreement, flag the open-ended levies, and make sure a cap and the closing adjustments are understood, not discovered at closing. It is unglamorous work that saves real money.
Browse current projects in Mississauga and Brampton, or register for pre-construction alerts to get price lists and floor plans before the public window. To understand the money that comes before closing, see our guide to deposit structures.
Frequently Asked Questions
How much are closing costs on a pre-construction home in Ontario?
Budget roughly 3 to 5 percent of the purchase price for a freehold home, and more for a condo once development levies and interim occupancy fees are counted. The largest single item is usually land transfer tax, which is charged twice for buyers inside the City of Toronto.
When is land transfer tax due on a pre-construction home?
At final closing, when title transfers to you, not when you sign the agreement years earlier. It is calculated on the purchase price using Ontario's tiered rates, plus a second municipal land transfer tax if the home is inside the City of Toronto.
What are development levies and can I cap them?
Development charges and education levies are fees municipalities charge on new homes, and builders commonly pass them to buyers at closing. They are often written as open-ended, so they can run into the thousands. Your lawyer can negotiate a cap, a firm ceiling, usually within a short window after signing a condo agreement.
Do first-time buyers get a break on land transfer tax?
Yes. Ontario refunds up to $4,000 of provincial land transfer tax for eligible first-time buyers, which fully covers the tax on a home up to $368,000. First-time buyers in Toronto can also claim up to $4,475 back on the municipal land transfer tax. You cannot have owned a home anywhere in the world.
What are interim occupancy fees on a pre-construction condo?
They are monthly payments to the builder during the gap between when your unit is ready and when the building registers and you take title. The fee covers interest on the unpaid balance, estimated property taxes, and estimated common expenses. It is not a mortgage payment and does not build ownership.
Is the Tarion enrolment fee included in the price?
The enrolment fee is charged to the builder, but on most pre-construction deals it is passed to the buyer as a closing adjustment. It scales with the price of the home, so a higher-priced home carries a higher fee. Check your agreement to see whether it is included or added at closing.