Interim Occupancy Fees in Ontario: 2026 Buyer's Guide

An Ontario interim occupancy fee is the monthly amount a pre-construction condo buyer pays to the builder after moving in but before title transfers. Section 80 of the Condominium Act, 1998 caps this fee at the sum of three components: interest on the unpaid purchase balance at the Bank of Canada conventional-mortgage rate on the interim closing date, an estimated component for common expenses, and an estimated component for realty taxes attributable to the unit. Occupancy fees are not mortgage payments. They do not reduce your principal, they do not build equity, and they do not appear as an expense on your first mortgage statement. Buyers should plan for two to twelve months of this cost, occasionally longer in large or phased projects.

Key takeaways

Interim occupancy runs from the day the unit becomes habitable and the buyer takes possession to the day the condominium corporation registers on title.
The maximum monthly interim occupancy fee is set by section 80 of the Condominium Act, 1998. It is the sum of the interest on the unpaid balance, the estimated monthly common expense, and the estimated monthly realty tax.
The interest rate used is the Bank of Canada conventional-mortgage rate for the term chosen on the interim closing date, calculated on the balance owing after all deposits.
Buyers cannot rent out the unit during interim occupancy unless the builder consents, since title has not transferred.
Occupancy fees are not deductible for owner-occupiers and are generally not deductible against rental income for the buyer either, because there is no rental of a legal condominium unit until title registers. Speak with an accountant.

What "interim occupancy" means
How the monthly fee is calculated
How long interim occupancy usually lasts
Renting the unit during interim occupancy
What happens on final closing
Worked example: monthly cost on an $850,000 suite
Common risks and misunderstandings
Occupancy checklist
Frequently asked questions

What "interim occupancy" means

Ontario condominium law separates the moment a building becomes livable from the moment a specific unit becomes a legal condominium. The building is livable when the City issues an occupancy permit. Individual units become legal condominium units only when the condominium declaration and description are registered on title with the Land Registry Office.

In practice this means new buyers move in before final closing. During the gap between move-in and title registration, the buyer has "interim occupancy" of the unit. Legal title still sits with the builder. The buyer is the equitable occupant with a right to possess and use the unit under the Agreement of Purchase and Sale.

Because the buyer has not yet closed on title:

Their mortgage has not funded and their lender is not receiving payments yet.
The buyer cannot register their name on title.
The buyer cannot mortgage or resell the unit in the normal way.
The buyer pays the builder a monthly interim occupancy fee for the right to occupy the unit.

How the monthly fee is calculated

Section 80 of the Condominium Act, 1998 caps the monthly interim occupancy fee at the total of these three components:

Interest on the unpaid balance. The interest rate is the Bank of Canada posted rate for conventional mortgages for the term chosen (usually five years), on the interim closing date. The balance is the purchase price less all deposits paid to date. Interest is calculated on that balance for the month.
Estimated common expense for the unit. This is the builder's estimate of the monthly maintenance fee based on the budget forecast in the disclosure statement.
Estimated realty tax attributable to the unit. This is the builder's estimate of the monthly property tax the City of Toronto will eventually assess against the unit.

The Act sets a cap, not a floor. Some builders charge less than the cap. Most charge at or very close to the cap.

A worked calculation for a specific price appears further down. The important observation is that in a rising-rate environment the interest component can be significantly larger than in a low-rate environment. A pre-construction buyer who signed in 2019 assuming 3% interest on the unpaid balance can face a much larger occupancy fee if the Bank of Canada conventional-mortgage rate has risen by the time interim occupancy begins.

How long interim occupancy usually lasts

Interim occupancy lasts from the day the buyer takes possession until the condominium corporation registers on title. Common durations:

Small mid-rise projects: often 1 to 3 months.
Large downtown Toronto towers: often 3 to 9 months.
Phased projects (Tower A, Tower B, Tower C): the buyer in Tower A can sometimes be in interim occupancy for 12 months or more while the project continues.

The Tarion Statement of Critical Dates on the APS lists the tentative and outside occupancy dates for the buyer's unit, and the tentative and outside registration dates for the condominium corporation. The gap between them is roughly the buyer's expected interim occupancy period. Reading the Statement of Critical Dates carefully before signing is a good way to model the exposure.

For how delays and extensions to these dates work, see the pre-construction delays and Tarion rights guide.

Renting the unit during interim occupancy

Because title has not transferred, most builder-form APSs prohibit the buyer from renting or otherwise transferring possession during interim occupancy without the builder's written consent. Some builders will consent to a specific tenant or family member; many refuse. If the buyer wants to rent, that intention should be discussed with the builder well before interim occupancy.

Renting out a unit without consent can breach the APS. Consequences vary but can include termination and a Tarion complaint.

Once title transfers on final closing, standard rental rules apply.

What happens on final closing

Once the condominium corporation is registered:

The builder's lawyer sets a final closing date.
The buyer's mortgage funds and their lawyer registers title in the buyer's name.
Land transfer tax, HST (if applicable), and builder adjustments are paid. See the pre-construction condo closing costs guide.
Interim occupancy fee payments stop. The buyer switches to the normal owner regime: mortgage payments, common expenses billed directly by the property manager, and realty tax billed directly by the City.
Any interest on the deposit accrued under Ontario Regulation 48/01 is credited on the statement of adjustments.

Worked example: monthly cost on an $850,000 suite

Assumptions (illustrative only, not tied to any specific project):

Purchase price: $850,000.
Deposits paid: 20% ($170,000) before interim occupancy.
Unpaid balance at interim occupancy: $680,000.
Estimated common expense: $550 per month.
Estimated realty tax: 0.6% of purchase price per year for a Toronto condominium unit, which is $5,100 per year or $425 per month (illustrative only; actual rate depends on the City of Toronto residential tax rate in the year of assessment).
Bank of Canada conventional-mortgage rate on the interim closing date: for illustration, 6.0%.

Interest on the unpaid balance for one month at 6.0% is:

$680,000 × 6.0% ÷ 12 = $3,400 per month.

Total monthly interim occupancy fee (cap under section 80):

Interest component: $3,400
Estimated common expense: $550
Estimated realty tax: $425
Total monthly maximum: $4,375

Over a six-month interim occupancy period the buyer would pay about $26,250, none of which reduces their eventual mortgage principal.

This example uses illustrative numbers. The actual interest rate on the interim closing date is the number that matters. Buyers should re-run the arithmetic in the months before interim occupancy using the then-current Bank of Canada conventional-mortgage rate.

[TAL'S PRACTICAL NOTE: Add a two-to-four-sentence observation on how a real Toronto interim occupancy period played out for a buyer, including how much the fee ended up being and whether it was longer or shorter than expected.]

Common risks and misunderstandings

"Occupancy fees pay down my mortgage." They do not. They are rent to the builder for the right to occupy the unit before title transfers.
"My occupancy fee cannot change during the period." The builder's estimated components can be adjusted on final closing to reflect actual costs, and the interest component locks in on the interim closing date using the then-prevailing Bank of Canada rate.
"I can rent the unit out during interim occupancy." Not without written consent from the builder in almost every APS.
"Interim occupancy fees are tax deductible against rental income." Generally no, because the unit is not yet a legal condominium unit that the buyer can rent out. Confirm with an accountant.
"Interim occupancy always ends in a few weeks." Sometimes it does. In phased or large downtown projects it can run 6 to 12 months or more.
"The estimate on the APS is the number I'll pay." The estimate is a starting point. The interest component recalculates on the interim closing date.
"I do not need insurance during interim occupancy." The buyer should carry contents insurance and third-party liability insurance during interim occupancy. Confirm with your insurance broker.

Occupancy checklist

[ ] Located the Statement of Critical Dates on your APS and identified the tentative and outside interim occupancy dates and registration dates.
[ ] Modelled the maximum monthly occupancy fee at 200 to 300 basis points above the current Bank of Canada rate to stress test.
[ ] Reserved cash reserves to cover 3 to 12 months of occupancy fees plus closing costs.
[ ] Confirmed the estimated common expense and estimated realty tax with the builder in writing.
[ ] Obtained contents insurance and third-party liability insurance for the interim occupancy period.
[ ] Confirmed with the builder whether renting or Airbnb use of the unit is permitted before final closing.
[ ] Kept every builder notice regarding critical date changes, in case delayed-occupancy compensation becomes relevant.
[ ] Kept a folder of PDI deficiency records and warranty-form receipts.

Frequently asked questions

What are interim occupancy fees on an Ontario pre-construction condo?

A monthly amount the buyer pays to the builder from the day they move in until title transfers on final closing. Under section 80 of the Condominium Act, 1998 the fee is the sum of interest on the unpaid balance at the Bank of Canada conventional-mortgage rate, plus an estimated common expense, plus an estimated realty tax.

How long does interim occupancy usually last in Toronto?

Anywhere from a few weeks to over a year, depending on the project size and how quickly the condominium corporation is registered.

Are interim occupancy fees mortgage payments?

No. They do not reduce your principal and are not paid to your lender.

Can I rent out the unit during interim occupancy?

Not without written consent from the builder, in almost every APS.

Are occupancy fees deductible?

For owner-occupiers, no. For investors, generally no, because there is no legal rental of a condominium unit until title registers. Confirm with a qualified accountant.

What happens to my deposit interest?

Deposit interest at the prescribed rate under Ontario Regulation 48/01 is credited at final closing on the statement of adjustments.

Do I have to pay realty tax to the City during interim occupancy?

No. The builder still owns the unit, so realty tax is billed to the builder. The buyer's contribution comes through the interim occupancy fee.

Can the builder increase my occupancy fee once it starts?

The interest component is fixed on the interim closing date at the Bank of Canada rate on that day. The estimated components can be adjusted to reflect actual costs. Any increase should be documented.

Conclusion

Interim occupancy is a normal part of a pre-construction condo purchase in Ontario, not an anomaly. The mechanics are set by statute, so the numbers can be modelled before you sign. Buyers who understand that occupancy fees are not mortgage payments, who reserve cash for the period, and who read the Statement of Critical Dates carefully are far less likely to feel ambushed when the phase begins.

Call to action

Trying to model interim occupancy fees for a specific Toronto project? Browse pre-construction condo listings on CondoWizard or contact the team to walk through the numbers on your APS before you sign.

Sources and last reviewed

Government of Ontario. Condominium Act, 1998, section 80. https://www.ontario.ca/laws/statute/98c19
Government of Ontario. Ontario Regulation 48/01 (deposit interest). https://www.ontario.ca/laws/regulation/010048
Tarion. Statement of Critical Dates and interim occupancy. https://www.tarion.com
Bank of Canada. Conventional mortgage rate (5-year). https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/
Condominium Authority of Ontario. Buyer information on occupancy fees. https://www.condoauthorityontario.ca

Last reviewed: 2026-07-25. Occupancy fee calculations depend on the Bank of Canada rate at your interim closing date. Buyers should verify current information with the appropriate professional and official authority before signing.

Interim Occupancy Fees in Ontario Explained