A lot of new homes are going up around here. In the first half of 2026 the City of London had 2,200 new home starts, well above its ten-year average of 1,165 for those months, according to LSTAR's summary of CMHC data.
Buying from a builder isn't like buying resale. The contract, the warranty and the tax rules are all different, and the closing bill can hold surprises. Here's what to know before you sign.
Your warranty: 1, 2 and 7 years
Ontario builders must provide a warranty, backed by Tarion. It runs from the day you take possession (the occupancy date, for a condo unit):
| Warranty | What it covers, in short |
|---|---|
| 1 year | Workmanship and materials |
| 2 years | Items such as water getting in, heating and electrical |
| 7 years | Major structural defects |
Tarion's warranty also includes temporary relocation coverage of up to $150 a day, to a maximum of $15,000, for days your home can't be lived in.
Your deposit: what Tarion protects
Know the limits before you pay. For agreements signed on or after January 1, 2018:
| Type of home | Tarion deposit protection |
|---|---|
| Freehold, price $600,000 or less | Up to $60,000 |
| Freehold, price over $600,000 | 10% of the price, up to $100,000 |
| Condominium unit | Deposits must be held in trust under the Condominium Act; if that fails, Tarion covers up to $20,000 |
New in 2026: register within 45 days. Starting April 1, 2026, Tarion asks new home buyers to sign up for deposit protection within 45 days of signing their agreement. For freehold buyers, Tarion says those who register in time get the maximum coverage, while late or unregistered buyers fall under a separate fund with a yearly limit. Tarion has deferred that change to deposit coverage until January 1, 2027, but there's no reason to wait: register as soon as you sign.
If your deposits will add up to more than these limits, ask your lawyer how the rest is protected before you pay it.
Cooling-off periods
- New condos. Ontario law gives buyers of a new condo from a developer a 10-day period to cancel. It starts once you have the key documents, including the disclosure statement and Ontario's Condo Buyers' Guide.
- New freehold homes. A 10-day cooling-off period for new freehold homes is coming with new provincial rules that take effect January 1, 2027. Until then, don't sign a freehold agreement expecting one. Have a lawyer review it before you sign.
Tarion's addendum to freehold agreements also allows conditions that are only for your benefit, if the builder agrees, such as the sale of your current home or your financing (Tarion freehold form, section 6).
HST: the big 2026 change
New homes carry HST: 13% in Ontario, made up of the 5% federal part and the 8% provincial part. Rebates bring that down, and in 2026 they got much bigger.
| Rebate | Agreement with builder signed | Most it can cover |
|---|---|---|
| Ontario enhanced rebate and top-up (any buyer of a home to live in) | April 1, 2026 to March 31, 2027 | Full 13% HST on homes up to $1 million; up to $130,000 on homes from $1 million to $1.5 million; phases out by $1.85 million |
| Federal first-time home buyers' rebate | March 20, 2025 to the end of 2030 | Full 5% federal part, up to $50,000, on homes up to $1 million; phases out by $1.5 million |
| Ontario first-time home buyers' rebate | March 20, 2025 to December 31, 2030 | Full 8% provincial part, up to $80,000, on homes up to $1 million; reduced up to $1.5 million |
| Regular new housing rebates | Any time | Federal: up to $6,300, on homes under $450,000. Ontario: up to $24,000 |
How they fit together:
- The Ontario enhanced rebate covers the 8% provincial part, up to $80,000 including the regular Ontario rebate. Ontario's New Home Affordability Payment then tops up the 5% federal part, up to $50,000, reduced by any federal rebate you can claim (Ontario; CRA notice). You don't have to be a first-time buyer.
- First-time buyers can claim the Ontario first-time rebate, the enhanced rebate, or both, but all rebates on the 8% part together are capped at $80,000 or the provincial HST you paid, whichever is less.
- The federal first-time rebate is law: the bill received Royal Assent on March 12, 2026. To qualify you must be at least 18, a Canadian citizen or permanent resident, buying the home as your primary residence, and not have lived in a home you or your spouse or partner owned this year or in the previous four calendar years.
Each rebate has its own construction deadlines. Read how the builder quotes its price, too: a price can include HST with some rebates assigned to the builder (CRA has a whole guide on this). Ask exactly which rebates the price assumes, and what happens if you turn out not to qualify.
The closing bill: adjustments builders add
The price on the agreement isn't the whole cheque. Under Tarion's addendum, only items listed in Schedule B can be added to the price or the balance due on closing:
- Part I lists fixed amounts, with the dollar figure stated in the agreement.
- Part II lists charges worked out later, under the terms of the agreement.
The builder also can't charge you, as an adjustment, for money it paid or owes a third party unless that money actually goes to the third party.
Go through Schedule B with your lawyer before you sign. Things to look for:
- Development charges. Ontario says these municipal charges have added more than $100,000 to the cost of a new home in some instances. If the agreement lets the builder pass on increases, ask for a written cap.
- Tarion enrolment fee and any other fixed fees in Part I.
- Utility connections and meters. RECO's buyer's checklist reminds buyers to budget for utility hookups.
- Anything open-ended in Part II. If it can't be priced now, ask for a maximum.
Then add the usual costs on top: land transfer tax, legal fees and moving.
If closing is delayed
On a freehold home with a firm closing date, Tarion's addendum says the builder owes you delay compensation if it misses that date without your agreement or a permitted reason: $150 a day for living expenses, plus other costs with receipts, up to $7,500 in total. You claim within one year of closing.
Before you sign anything
- Have a real estate lawyer review the agreement, the Tarion addendum and Schedule B.
- Register with Tarion within 45 days.
- Confirm which HST rebates the price assumes.
- Make sure your pre-approval covers the full closing amount, not just the price.
Weighing a new build against a resale? You can browse homes for sale here, or send me a note with the builder or subdivision you're looking at.
General information, not legal or tax advice. Tarion limits, rebate rules and dates as of October 2026; your lawyer confirms what applies to your agreement.