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

Construction Loan

A construction loan is a short-term, interim financing option used to fund the building or major renovation of a property, with funds disbursed in. more

Certificate of Occupancy

A certificate of occupancy is an official document issued by a municipal authority confirming that a building complies with applicable codes and is. more

Bylaw Variance

A bylaw variance is official permission granted by a municipal authority allowing a property owner to deviate from local zoning or building bylaw. more

Absorption Rate

Absorption rate is a metric that measures the rate at which available properties are sold or leased in a specific market over a given period.. more

Corporate Restructuring

Corporate restructuring refers to the reorganization of a company’s operations, assets, or liabilities, often under court supervision, to improve. more

Consumer Proposal

A consumer proposal is a formal, legally binding agreement in Canada between an individual and their creditors to repay a portion of their debt over. more

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