What costs are there on a new build beyond the builder deposit?

All the usual closing costs - land transfer tax, legal fees and disbursements, title insurance and adjustments - plus items specific to new construction: development and levy charges that may or may not be capped in the agreement, utility connection and meter fees, Tarion enrolment on new homes in Ontario, HST adjustments, and occupancy fees during any interim period before the building is registered.

What is interim occupancy on a new condo and what does it cost?

It is the period between moving into a new condominium unit and the building being formally registered. During it the buyer lives in the unit and pays the builder a monthly occupancy fee, made up roughly of interest on the unpaid balance plus estimated taxes and maintenance. None of it pays down the mortgage, because the mortgage has not started, and the period can run for months.

Are development charges on a new build capped?

It depends entirely on the agreement of purchase and sale. Well-drafted agreements cap the development charges and levies that can be passed on to the buyer, but not all do, and an uncapped clause can represent a significant sum at closing. A buyer who does not know their cap should ask their real estate lawyer to confirm it well before the closing date.

Answers › New Builds & Pre-Construction

The builder deposit is paid. What else do I need before closing?

Answered by Rajiv Verma, Mortgage Broker · Updated August 2026 · About a 5 minute read

The direct answer

The deposit is the beginning, not the budget. A new build closes with the same costs as a resale — land transfer tax, legal fees, title insurance, adjustments — plus a set that only exists on new construction: development and levy charges, utility connection and meter fees, and occupancy costs during any interim period before final registration. Several of these are capped in your agreement, and several are not. The single most useful thing you can do is have your lawyer read the cost clauses before you need the money, not after.

THE SHORT VERSION

All the usual closing costs still apply — they’re set out here
Development and levy charges can be passed to you, sometimes capped, sometimes not
Utility connection, meter and enrolment fees are a new-build item
Condos may have an occupancy period — you pay to live there before the mortgage starts
Your income and credit are re-checked before final closing, however long ago you signed

The costs that only exist on new builds

Development charges and levies. Municipal charges the builder may pass on. Well-drafted agreements cap them; some don’t, and an uncapped clause can be a meaningful sum. Your lawyer should have told you the cap at the time of signing — if you don’t know it, find out now.

Utility connection and meter fees. Hydro, water, gas — connection, meter installation and enrolment charges that a resale buyer never sees.

Tarion enrolment on new homes in Ontario, and HST adjustments where the price treatment shifts.

Occupancy fees on condos. This is the one people don’t see coming.

The part nobody tells you — interim occupancy.

On many new condos there’s a period between moving in and the building being registered. During it you live in the unit and pay the builder a monthly occupancy fee — roughly interest on the unpaid balance, plus estimated taxes and maintenance.

None of it pays down your mortgage. Your mortgage hasn’t started. It is rent, in effect, on a home you have bought.

That period can run months. Budget for it as an additional monthly cost on top of everything else, because it is one.

The part that isn’t money

Your file is underwritten again before final closing. Updated income documents, a fresh credit check, confirmation of the down payment, and an appraisal.

If anything has changed since you signed — and over a two-year build something usually has — this is the page to read next.

The rule I give every new-build buyer

Don’t spend every dollar on the deposit.

Builders structure deposits in instalments, and it’s easy to treat each one as the last obligation. It isn’t. Keep a closing cushion that you do not touch, and treat any occupancy period as a real monthly cost rather than a technicality.

The buyers who struggle are almost never the ones who couldn’t afford the home. They’re the ones who budgeted for the deposit and the mortgage payment and nothing in between.

What to check in your agreement

The cap on development charges and levies — and whether there is one
Whether there’s an interim occupancy period, and the estimated fee
What HST treatment applies, and whether any rebate is assigned to the builder
The deposit schedule, and what remains outstanding
Whether the agreement permits assignment
Your firm closing date and the builder’s extension rights

What to do next

Two things, in this order.

Have your lawyer summarise the cost clauses — caps, occupancy, HST — in plain numbers. That’s their job and it’s worth the hour.

Then send me the closing date and your current position, and we’ll confirm the financing side well before the builder’s package arrives.

Plan my new-build closing →

Related questions

Answered by Rajiv Verma, Mortgage Broker · Mortgage Architects — FSRA Brokerage Licence #12728 · Licensed in Ontario · Office 289.505.0631 · Direct 647.291.7116

General educational information only and not legal or tax advice. Which charges apply, and whether they are capped, depends entirely on your own agreement of purchase and sale — that is a matter for your real estate lawyer. HST treatment and rebate eligibility must be confirmed by your lawyer or accountant. Position stated as at August 2026.