Deposit Structure
Understand how deposit structures work in Canadian real estate, especially for pre-construction purchases, and how they affect your financial obligations.
May 22, 2025
What is Deposit Structure?
Deposit structure refers to the schedule and breakdown of payments a buyer must make as a deposit when purchasing a property, especially in pre-construction real estate transactions.
Why Deposit Structures Matter in Real Estate
In Canada, especially in hot real estate markets, pre-construction condo purchases often involve a staged deposit structure rather than a single lump sum. This makes large purchases more manageable and gives the builder security during the development process.
A typical deposit structure might include:
- 5% upon signing the Agreement of Purchase and Sale
- 5% in 90 days
- 5% in 180 days
- 5% at occupancy
The total deposit often ranges from 15% to 25%, depending on the developer and market. These deposits are usually held in trust and protected under provincial legislation.
Understanding the deposit structure is vital for financial planning. Missing a payment deadline may jeopardize the contract or incur penalties. Buyers should also confirm whether deposits are refundable under specific conditions.
Example of Deposit Structures in Action
A buyer agrees to a 20% deposit structure for a pre-construction unit: 5% at signing, 5% in 90 days, 5% in 180 days, and 5% at interim occupancy.
Key Takeaways
- Defines the schedule for deposit payments.
- Common in pre-construction transactions.
- Total deposit may range from 15% to 25%.
- Deposits are held in trust.
- Must be paid on time to keep contract valid.
Related Terms
- Agreement of Purchase and Sale
- Pre-Construction Condo Purchase
- Trust Account
- Occupancy Date
- Refundable Deposit
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)