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

Sale and Investment Solicitation Process (SISP)

A Sale and Investment Solicitation Process (SISP) is a formal court-supervised method of marketing, selling, or refinancing distressed assets during. more

Retail Zoning

Retail zoning is a land use designation that permits commercial activities such as stores, restaurants, and service-based businesses to operate in. more

Ingress and Egress

Ingress and egress refer to the legal rights of access into (ingress) and out of (egress) a property, particularly important in commercial real. more

Housing Supply

Housing supply refers to the total number of homes — both for sale and under construction — available to meet the housing needs of a population in a. more

Housing Inventory

Housing inventory refers to the total number of homes available for sale in a specific real estate market at a given time.. more

Gentrification

Gentrification is the process by which a traditionally lower-income neighbourhood undergoes revitalization and attracts higher-income residents,. more

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