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PreConstruction Buying Guide

Your guide to Buying Pre-Construction in the GTA

Introduction to Pre-Construction

This overview doesn't replace legal advice for your purchase. It outlines the pre-construction process and closing costs. Always have a Real Estate Lawyer review your Agreement of Purchase and Sale.

01

Priority List

Stay ahead of the curve by submitting your worksheet to join our priority list. By doing so, you'll receive timely updates on project details, increasing your opportunity to reserve a suite before they are sold.

03

After Signing

Enter the 10-Day Cooling Period after submitting the deposit and post-dated cheques to the builder.

05

Financing Prep

Obtain your pre-approval within 60 days. We recommend you consult your mortgage specialist early on in the process.

07

Land Transfer Tax

Understand provincial and municipal taxes, including potential rebates for first-time buyers.

02

Initial Deposit

Secure your unit swiftly by preparing the initial deposit as a bank draft payable to the builder's solicitor before the launch date. This ensures prompt decision-making and immediate unit reservation upon receipt.

04

Legal Expertise

Work with a specialized Real Estate Lawyer for a thorough document review.

06

Closing Costs

Closing cost can be 5-8% of the purchase price, land transfer tax, legal fees, closing costs (development levies, hydro connection & parks/improvement levies)

08

Legal Fees & Title Insurance

You will need a lawyer to close the transaction. Please speak with your Real Estate Lawyer about their fees.

09

Pre-Delivery Inspection

This is completed with Tarion Warranty before your occupancy date to address any deficiencies before moving in. 

Two Stages of Closing in Condo Purchases

Stage 1

Interim Occupancy

During this phase, you pay interest only payments on the balance of your purchase price owing to the builder, along with property tax and condo fees. Post-dated cheques for the estimated occupancy period are required.

Stage 2

Final Registration

This step marks official ownership. Inform your lawyer in advance, finalize mortgage paperwork, and consider insurance options. If the unit is not owner-occupied, HST is added back on the final statement of adjustment.

HST Rebate Guidelines for Condo Buyers

01

If you leased your unit during interim occupancy, this is what you will need to apply for the rebate.

  • Copy of the first 2 pages of the Agreement of Purchase and Sale

  • Copy of lease agreement

  • Interim statement of adjustments from the developer

  • Final statement of adjustments from your lawyer

  • Lawyers office adjustment on final registration

02

Most purchase agreements include the HST New Housing Rebate, but eligibility criteria apply:

  • Buyers must intend to use the property as their primary residence

  • Speak with a specialized real estate lawyer for detailed contract review.

What is an Assignment?

Assignment sales involve transferring pre-construction property purchase rights to another party before completion. Here's why you might consider it:

  1. Avoid closing costs and mortgages. 

  2. Your plans have changed.

  3. Ensure your purchase agreement allows assignment, noting any developer fees.

  4. Original buyer remains liable if terms aren't met.

  5. Have a contract with the assignee, prepared by a professional.

  6. Receive original down payment and any profit.

  7. Effective marketing relies on realtor networks; funds are held in trust until builder consent.

For more information, click here.

Taxes, Warranties, and Property Values in Pre-Construction Purchases

01

Property Taxes

For pre-construction purchases, you're obligated to pay property taxes. However, since the total cost of your transaction isn't determined, the taxes paid are estimates. They'll be adjusted once the municipality provides a final assessment. Often, this assessment results in a refund.

02

Tarion Warranty

Protects buyers for up to 7 years, starting from the Agreement of Purchase & Sale date. For more information, click here

03

Value Factors

  • Platinum VIP Access: Early access for customization and lower prices.

  • Early Investment: Secure unit before prices rise.

  • Occupancy Sales: Potential for quick returns without closing costs.

  • Registered Resales: Units can be resold after registration.

  • Post-Registration Benefits: Reduced competition may increase resale value.

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