Buying a pre-construction condo or home in Ontario can be an exciting investment—but many buyers get caught off guard by closing costs they didn’t fully expect. Unlike resale properties, pre-construction purchases come with additional fees that can add up quickly if you’re not prepared.

Let’s break down exactly what pre-construction closing costs are, how much you should budget, and how to avoid last-minute surprises.

What Are Pre-Construction Closing Costs?

Pre-construction closing costs are fees paid on or before final closing when the builder hands over the property and legal ownership transfers to you. These costs are separate from your deposit and mortgage and are typically outlined in the Agreement of Purchase and Sale (APS).

Common Pre-Construction Closing Costs in Ontario

1. Development Charges

Municipal fees charged to developers to fund infrastructure like roads, parks, and utilities.
✔ Often capped, but not always
✔ Can range from $5,000–$20,000+

2. Education Development Charges

Fees collected by local school boards.
✔ Usually capped
✔ Often between $1,000–$5,000

3. Utility Connection Fees

Costs to hook up hydro, gas, water, and sewer services.
✔ Typically $1,500–$3,000

4. Tarion Warranty Enrollment Fee

Mandatory new-home warranty coverage in Ontario.
✔ Depends on purchase price
✔ Paid at final closing

5. HST Adjustments

Most new homes include HST in the price, after rebates.
⚠ If you don’t qualify for the rebate (or plan to rent), you may need to repay it at closing.

6. Statement of Adjustments

Includes prepaid property taxes, utilities, and condo fees.
✔ Usually a smaller amount
✔ Still important to budget for

7. Legal Fees & Disbursements

Your real estate lawyer handles title transfer and registrations.
✔ Typically $1,500–$2,500

8. Occupancy Fees (Interim Occupancy Period)

For condos, you may pay:

• Monthly occupancy fee

• Estimated condo fees

• Property tax portion

⚠ These payments do not go toward your mortgage

How Much Should You Budget?

As a general rule, buyers should budget 1.5%–4% of the purchase price for pre-construction closing costs.

💡 For a $700,000 pre-construction condo, that could mean $14,000–$28,000.

How to Avoid Costly Surprises

✔ Review caps and adjustments in the APS
✔ Ask for a closing cost estimate early
✔ Work with a realtor experienced in pre-construction
✔ Use a lawyer who specializes in new builds

Pre-construction can be a powerful long-term investment—but only when you understand the numbers upfront.

Ready to Buy Pre-Construction With Confidence?

Don’t go into a pre-construction deal blind. I’ll walk you through real closing cost estimates, builder terms, and smart strategies before you sign anything.

📲 Parth Jani
📞 647-907-6386
📩 parth@janirealty.ca
🌐 www.parthjani.com

*Let’s make sure your pre-construction purchase comes with excitement—not surprises.