New Construction Closing Costs
Explore closing costs for new construction homes in Canada, from development fees to HST, and learn how to budget wisely.
May 22, 2025
What are New Construction Closing Costs?
New construction closing costs are additional fees and charges incurred when purchasing a brand-new home or condo, beyond the standard down payment and mortgage costs.
Why New Construction Closing Costs Matter in Real Estate
In Canadian real estate, buyers of newly built properties face unique closing costs not typically seen with resale homes. These can include:- Tarion Warranty fees (Ontario)
- Development charges and levies
- HST (sometimes included in the price, sometimes not)
- Legal fees and land transfer tax
- Utility hook-up and connection fees
- Interim occupancy fees (for condos)
Failing to budget for these expenses can create last-minute financial stress or even derail the transaction.
Buyers should request a full cost breakdown, review the contract with a real estate lawyer, and plan for additional cash on hand at closing. Government rebates (like partial HST rebates) may apply in some cases.
Understanding new construction closing costs ensures financial readiness and prevents surprises during a complex transaction.
Example of New Construction Closing Costs
A buyer of a new condo in Toronto discovers an additional $18,000 in development charges and interim occupancy fees due at closing, not included in the purchase price.
Key Takeaways
- Unique to new builds and pre-construction.
- Includes levies, warranty, and hook-up fees.
- HST may or may not be included.
- Must be budgeted in addition to down payment.
- Legal review and builder transparency are essential.
Related Terms
- Closing Costs
- Interim Occupancy
- Tarion Warranty
- Land Transfer Tax
- HST Rebate
Renderings of the condo tower and rental building. (Dys Architecture, StreetSide Developments)
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