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
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)
