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

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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