Pre-Construction Condo Closing Costs in Toronto

Toronto pre-construction condo buyers write two rounds of cheques after the purchase price: monthly interim occupancy amounts while awaiting title, and a lump of closing costs at final closing. The main lines at final closing are Ontario Land Transfer Tax and Toronto Municipal Land Transfer Tax, HST net of the applicable rebates, development charges and levies (usually capped in the Agreement of Purchase and Sale so the buyer's exposure is limited to that cap), a Tarion enrolment fee, utility hookups, a two-month reserve-fund contribution, and legal fees. As of July 2026 the HST landscape has changed materially: a federal First-Time Home Buyers' GST Rebate (Bill C-4, Royal Assent March 12, 2026) and a temporary Ontario Enhanced New Housing Rebate (in effect for APSs signed April 1, 2026 through March 31, 2027) can substantially reduce the effective HST for qualifying purchases.

What closing costs mean for a pre-construction condo

Resale buyers close once. Pre-construction buyers close twice. The first stage is interim occupancy: the building is habitable, the buyer moves in, and pays a monthly interim occupancy amount to the builder under section 80 of the Condominium Act, 1998. Title has not transferred yet. Even at this stage, buyers should budget for professional fees related to the pre-delivery inspection, unit insurance, and any project-specific fees the APS attaches to interim occupancy.

The second stage is final closing. The condominium corporation registers on title with the Land Registry Office, the unit becomes a legal condominium, the buyer's mortgage funds, and the transfer registers. All of the taxes, government fees, builder adjustments, and legal costs described in this guide land on this second stage.

Interim occupancy is covered in depth in the interim occupancy fees in Ontario guide.

Land transfer tax in Toronto (updated April 2026)

Land transfer tax is charged twice on every Toronto purchase: once by the Province of Ontario and once by the City of Toronto. Both taxes apply to the purchase price on title. On December 17, 2025 Toronto City Council approved graduated Municipal Land Transfer Tax rates for high-value residential properties, effective April 1, 2026.

Ontario Land Transfer Tax rates

Per the Ontario Ministry of Finance (unchanged in 2026):

Toronto Municipal Land Transfer Tax rates (effective April 1, 2026)

For residential properties containing one or two single-family residences, per the City of Toronto MLTT rate schedule:

The April 1, 2026 amendment increased the rates above $3,000,000 (previously 3.5% to 7.5%). Base tiers up to $3,000,000 are unchanged. Pre-construction purchasers who signed before April 1, 2026 but register title after that date should confirm which tariff applies with their lawyer.

Toronto also charges a Municipal Non-Resident Speculation Tax of 10% on residential purchases by non-residents, in addition to the Ontario Non-Resident Speculation Tax.

First-time buyer LTT rebates

A qualifying first-time buyer may receive:

• Up to $4,000 rebate against Ontario Land Transfer Tax.
• Up to $4,475 rebate against Toronto Municipal Land Transfer Tax.

Both require the buyer to be a Canadian citizen or permanent resident, at least 18 years old, occupy the property as a principal residence within nine months, and never have owned a home anywhere in the world (including through a spouse, during the period of the relationship). Investors, corporations, and buyers assigning the property before closing do not qualify. The Toronto rebate must be claimed within 18 months of registration.

HST on new condos: the 2026 rebate landscape

HST at 13% applies to every new residential condominium purchase in Ontario (5% federal GST + 8% Ontario portion). Four distinct rebate programs now interact for buyers signing in 2026:

Program 1: GST/HST New Housing Rebate (existing)

Under the Excise Tax Act, the existing New Housing Rebate reduces HST for buyers occupying the unit as a primary place of residence (or where a qualifying relation will occupy):

• Federal portion: available for homes with fair market value up to $450,000, phasing out between $350,000 and $450,000.
• Ontario portion: up to $24,000 (75% of the provincial 8% component), no phase-out based on price.

Most Toronto pre-construction APSs historically have priced the unit "inclusive of HST net of the assumed Ontario New Housing Rebate of $24,000," with the rebate assigned to the builder on signing.

Program 2: Federal First-Time Home Buyers' GST/HST Rebate (new in 2026)

Bill C-4 received Royal Assent on March 12, 2026 and introduced a new federal rebate for first-time home buyers of new homes:

• Applies to APSs signed with a builder on or after March 20, 2025 and before 2031.
• Eliminates 100% of the 5% federal GST on new homes valued up to $1,000,000, up to a maximum rebate of $50,000.
• Phases out linearly for homes between $1,000,000 and $1,500,000. Above $1,500,000, no rebate.
• First-time buyer definition (per CRA): the individual and their spouse or common-law partner have not lived in a residential unit owned by either of them in the current calendar year or any of the four preceding calendar years.
• Owner-occupier only. Investment properties, corporations, and partnerships are excluded.
• Can be credited by the builder at closing or claimed directly from CRA within two years of ownership transfer.

Program 3: Ontario Enhanced New Housing Rebate (temporary in 2026)

Announced in the 2026 Ontario Budget, the Enhanced New Housing Rebate temporarily increases the provincial portion of the HST rebate:

• Applies to APSs entered into between April 1, 2026 and March 31, 2027.
• Provides up to $80,000 in Ontario HST relief (100% of the provincial 8% portion on qualifying value).
• Full $80,000 available for homes valued up to $1,500,000; phases out linearly between $1,500,000 and $1,850,000 to the baseline $24,000; above $1,850,000, the standard $24,000 Ontario portion applies.
• Not limited to first-time buyers. Owner-occupiers qualify. Landlords buying to hold for long-term rental may qualify under a parallel Enhanced New Residential Rental Property Rebate.
• Can be credited by the builder at closing where the APS provides for it.

Program 4: Ontario Land Transfer Tax first-time buyer refund

Distinct from the HST rebates above. Up to $4,000 off Ontario LTT for qualifying first-time buyers, as described in the previous section.

Owner-occupier vs investor treatment

Owner-occupier who qualifies for the New Housing Rebate:

• The sticker price on most builder-form APSs is inclusive of HST net of the assumed Ontario New Housing Rebate ($24,000). No separate HST cheque at final closing.
• If the buyer is also a first-time home buyer signing on or after April 1, 2026 for a home under $1,500,000, the combined federal FTHB GST Rebate and Ontario Enhanced Rebate may provide significantly more relief. Whether the builder credits these enhanced rebates at closing or the buyer must claim them from CRA after closing depends on the specific APS and the builder's practice.

Owner-occupier who does not qualify (not a first-time buyer, or FMV above the phase-out thresholds):

• The existing New Housing Rebate still applies. The Ontario portion is up to $24,000. The federal portion is zero above $450,000.

Buyer intending to rent the unit:

• The New Housing Rebate cannot be assigned to the builder because the buyer will not occupy. Depending on the APS, the buyer may need to fund some or all of the assumed rebate amount at final closing, then apply for the New Residential Rental Property Rebate (or the Ontario Enhanced Rental version, if in the eligibility window) via CRA Form GST524.
• The specific amount the buyer must fund at closing is dictated by the APS pricing mechanism and the statement of adjustments. Buyers should confirm this number with their lawyer and the builder before final closing, rather than relying on a generic estimate.

Assignments:

• Since May 7, 2022, subsection 192.1(1) of the Excise Tax Act treats assignments of taxable new-housing agreements as taxable supplies. HST at 13% applies to the assignment fee, with a limited exception for the recovery of the original deposit. Whether the assignee inherits any FTHB or Enhanced Rebate depends on their own eligibility on the date of ownership transfer, not the assignor's.

Because the HST math depends on the specific APS, buyer status, and rebate eligibility window, buyers should confirm the actual HST amount from the statement of adjustments with their lawyer and, where applicable, a qualified accountant. The HST on pre-construction condos guide covers each rebate program in more detail.

Development charges and builder adjustments

Most builder-form APSs include an "Adjustments" or "Purchaser's Additional Payments" section that reimburses the builder for a set of government charges levied against the development. Typical categories:

• Municipal development charges under the Development Charges Act, 1997.
• Education development charges under the Education Act (Toronto District School Board and Toronto Catholic District School Board).
• Parkland dedication or cash-in-lieu under section 42 of the Planning Act.
• Community benefits charges under section 37 of the Planning Act.
• Utility hookups and Tarion enrolment (covered separately below).

How a purchaser cap works

Most Toronto APSs limit the buyer's exposure with a purchaser cap. A common formulation:

The Purchaser shall reimburse the Vendor for [listed government charges], up to a combined maximum of $15,000. Any amount above the cap shall be borne by the Vendor.

Under language like this, the cap is a ceiling on the buyer's contribution. If the actual government charges billed to the builder are $22,000 and the buyer's cap is $15,000, the buyer generally pays only up to the $15,000 cap and the builder absorbs the $7,000 overage. The mechanics turn on the exact wording of the APS: some clauses cap a combined bucket, some cap each item separately, some cap only "increases" above a stated baseline, and some leave certain items uncapped. Read the specific clause carefully during the ten-day cooling-off period. See the Ontario condo cooling-off period guide and the development charges and builder adjustments guide.

Tarion enrolment fee

Every new residential unit in Ontario must be enrolled with Tarion under the Ontario New Home Warranties Plan Act. The builder is legally required to pay the enrolment fee, but almost every APS re-charges the fee to the buyer as an adjustment on final closing. The fee is set out in Tarion's current schedule and scales with sale price. For most Toronto condominium units the fee falls in a range that buyers should verify from Tarion's current published schedule. HST applies to the enrolment fee.

Utility hookups and meter installations

Buyers usually reimburse the builder for the cost of installing individual suite meters and activating service (Toronto Hydro, Enbridge Gas where applicable, Toronto Water). Toronto condominiums often use a third-party sub-metering provider (for example Wyse, Provident, or Priority Submetering Solutions), in which case a one-time activation fee applies. The combined amount is set by the utility providers and the sub-metering contract, not by the builder, and varies by project. Buyers should ask the builder for a project-specific estimate rather than relying on a general figure.

Reserve-fund contribution

Section 84 of the Condominium Act, 1998 requires every condominium corporation to maintain a reserve fund for major repairs and replacement of common elements. Ontario Regulation 48/01 sets the minimum contribution rules. On first sale from the declarant, purchasers pay an initial reserve-fund contribution on final closing, commonly equal to the equivalent of two months of the estimated common expenses for the unit under section 76 of the Act. The exact amount is stated in the disclosure statement and on the statement of adjustments.

Legal fees, title insurance, disbursements

Fees are set by the lawyer, not by statute, and vary meaningfully between firms. A Toronto pre-construction final closing typically involves legal fees, title insurance, and disbursements (title searches, software fees, Teraview registration charges, courier). Buyers should obtain a written fee quote from a lawyer who reviews Ontario pre-construction closings regularly. Complex closings (assignments, corporate purchasers, non-resident buyers, or units affected by builder disputes) attract higher fees.

Property tax and common-expense adjustments

The builder pre-pays a portion of realty taxes and building operating expenses. The buyer reimburses the pre-paid portion allocated to their unit and to the days from final closing to the next period boundary. The dollar amount is small in most cases and is shown line-by-line on the statement of adjustments.

Worked example: $850,000 downtown Toronto suite

Combined land transfer tax (before FTHB rebate)

Other closing costs on the same suite

The total dollar figure at final closing depends on the specific project, the specific APS, the buyer's rebate eligibility, and the actual government charges billed. Investors and buyers who do not qualify for the New Housing Rebate should expect an additional HST-related cash requirement at closing that could later be recovered through CRA rebate applications. The correct number to plan against is the one on the buyer's own draft statement of adjustments from the closing lawyer, not a generic estimate.

Closing timeline

Common risks and misunderstandings

• Assuming the DC cap works against the buyer. In most Toronto APS wording, the cap is the ceiling on the buyer's exposure. If actual government charges exceed the cap, the builder generally absorbs the overage. Read the specific clause; results turn on the exact language.
• Missing the FTHB rebate deadlines. The Toronto MLTT rebate must be claimed within 18 months of registration. The Ontario portion is normally claimed at closing.
• Assuming a specific HST rebate number applies to your closing. Four rebate programs interact in 2026. The number that matters is the one on your own statement of adjustments.
• Assuming assignments avoid HST. Assignments of new-housing contracts are HST-taxable on the assignment fee since May 7, 2022 and any profit must be reported to CRA under the applicable characterization.
• Assuming interim occupancy involves only a monthly fee. Interim occupancy is a full transaction stage. Insurance, professional fees for the pre-delivery inspection, and any project-specific charges under the APS can also arise.
• Assuming Toronto MLTT rates are unchanged. The April 1, 2026 amendment increased rates above $3M. Confirm current rates when your unit is above that threshold.

Closing-cost checklist

Conclusion

Closing costs on a Toronto pre-construction condo are not exotic, but they turn on facts specific to the purchase: the APS wording, the buyer's rebate eligibility, the specific charges billed by the City and Tarion, and the terms the lawyer negotiates during the cooling-off period. The single most valuable hour a buyer can spend is with a real estate lawyer during the first ten days after signing, going line-by-line through the APS and confirming which HST rebate program applies. That same hour usually resolves the DC cap and Tarion questions that most buyers otherwise carry to final closing.

This guide is general information about closing costs for Toronto pre-construction condominiums. It is not legal, tax, or accounting advice. Rules, rebate programs, and dollar figures change; buyers should verify current information with the appropriate professional and official authority before signing an Agreement of Purchase and Sale or closing.