MUST READ: In Real Estate, What Is 'Luxury'? (And Who Gets To Define It?)

New Construction

Explore how buying new construction works in Canadian real estate, including timelines, warranty coverage, and key legal and financial considerations.

New Construction
Escrow – Definition, Meaning, and Examples in Canadian Real Estate

May 22, 2025


What is New Construction?

New construction refers to properties that are recently built or in the process of being built, typically offered by developers or homebuilders before or just after completion.

Why New Construction Matters in Real Estate

In Canadian real estate, buying new construction can offer customization options, modern layouts, and energy-efficient features. It also involves unique financial and legal considerations compared to resale properties.

Key characteristics include:

  • Purchase via builder or developer contract
  • Pre-construction or quick possession availability
  • GST/HST applicability on new homes
  • Coverage under provincial home warranty programs (e.g., Tarion in Ontario)
Buyers typically pay a deposit in stages and may wait months or years for possession. Interim occupancy may occur before final closing in condo developments. Legal advice is critical to review the Agreement of Purchase and Sale, builder obligations, and timelines.Understanding new construction ensures that buyers are prepared for long build cycles, staged payments, warranty protections, and post-completion responsibilities like deficiency review.

Example of New Construction

A buyer purchases a new construction townhouse with an estimated occupancy in 18 months and selects finishes like cabinetry and flooring upgrades during the design phase.

Key Takeaways

  • Involves purchase of newly built homes.
  • Requires staged payments and longer timelines.
  • Includes warranties and GST/HST.
  • Legal review of contracts is essential.
  • Buyers often choose design features.

Related Terms

  • Builder Compliance
  • Tarion Warranty
  • Interim Occupancy
  • Deposit Structure
  • Agreement of Purchase and Sale

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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