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New Construction Closing Costs

Explore closing costs for new construction homes in Canada, from development fees to HST, and learn how to budget wisely.

New Construction Closing Costs

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:
These costs can add tens of thousands of dollars to the final price of a new home. Builders often outline estimated closing costs in the purchase agreement, but the actual amount may fluctuate.

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

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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