Closing Costs
When buying a pre-construction condo, it’s not just the purchase price and deposit schedule. You also need to plan for closing costs that are typically paid at final closing (often 3–4 years after purchase). These are commonly listed in Schedule X of the builder’s agreement and show up in your Statement of Adjustments.
Treat closing costs like a separate budget line. Most buyers focus on deposits, then get surprised later. Planning early keeps your closing smooth and avoids last-minute cash pressure.
1) Levies & Development Charges
These are the most common adjustments on pre-construction closings in Ontario. Examples include:
Common levy types- Development charges: infrastructure costs (roads, utilities) tied to growth
- Education levies: funding new schools
- Section 37 levies: community benefits tied to density/zoning changes
- Public art levies: cultural/community enhancements
- Parks levies: park creation and maintenance
- Other municipal charges: project-specific municipal fees
2) Tarion Warranty Enrolment Fee
Every new home in Ontario comes with warranty coverage, and the purchaser pays an enrolment fee at closing. This can range roughly from $585 to $6,000, and it’s typically taxable.
3) Utility Meter Hook-Up Fees
Fees to ensure utility connections are active before move-in. These often range from $500 to $2,500.
4) Reserve Fund (Condo)
Many condo corporations require a reserve fund contribution at closing, often about two months of maintenance fees, so the corporation starts with working capital.
5) Other Miscellaneous Fees
Builders often include additional closing adjustments that can total roughly $2,000 to $5,000. These may include administration fees, electronic registration, Tarion site review, discharge of construction mortgage, and HST on certain items (example: appliances, where applicable).
Common Closing Costs for Every Transaction
Some costs apply whether you’re buying resale or pre-con. The big two are Land Transfer Tax and Legal Fees.
Land Transfer Tax (Ontario)
Land Transfer Tax is a major expense buyers often underestimate. It’s calculated based on the purchase price. Toronto buyers may pay an additional municipal LTT.
Legal Fees
Use a lawyer experienced in pre-construction agreements. Typical legal fees range from $500 to $1,500 (varies by complexity).
| Purchase Price Bracket | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000.01 to $250,000 | 1.0% |
| $250,000.01 to $400,000 | 1.5% |
| $400,000.01 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
First-time homebuyers in Ontario may qualify for a provincial LTT rebate (up to $4,000). If the property is in Toronto, an additional municipal rebate may apply (subject to eligibility and program rules).
Final note: Closing costs vary by builder and project. Always review Schedule X in your agreement for the exact items and caps.