Pre-Construction Condo Closing Costs in Toronto

Toronto pre-construction condo buyers pay two rounds of extra money after the purchase price: monthly occupancy fees during interim occupancy, and a lump of closing costs at final closing. On final closing, the main items are Ontario and Toronto land transfer tax, HST that was already priced in for owner-occupiers or paid out of pocket for investors, capped development charges plus any overage, a Tarion enrolment fee, hookup and meter charges, a two-month reserve-fund contribution, and legal fees. On an $850,000 suite closing in 2026, a first-time buyer who lives in the unit will typically write cheques for roughly $28,000 to $38,000 above the purchase price, depending on the agreement.

Key takeaways

• Interim occupancy fees are not part of closing costs. They are ongoing monthly payments made from the day you move in until title transfers.
• Ontario land transfer tax and Toronto Municipal Land Transfer Tax stack. A resident buyer at $850,000 pays about $26,950 in combined LTT before rebates.
• First-time buyers can rebate up to $4,000 of the Ontario tax and up to $4,475 of the Toronto tax, per the Ministry of Finance and the City of Toronto by-laws.
• HST is almost always included in the sticker price for owner-occupiers because the builder assigns the New Housing Rebate to itself. Investors buying to rent pay HST at closing and later apply for the New Residential Rental Property Rebate.
• Development charges, education levies, park levies, Tarion enrolment, and utility hookups appear as "builder adjustments" and are usually capped in your Agreement of Purchase and Sale. If the cap is missing or low, this line can be the biggest surprise.

Table of contents

• What closing costs mean for a pre-construction condo
• Land transfer tax in Toronto
• HST on the purchase
• Development charges, education levies, and other builder adjustments
• Tarion enrolment fee
• Utility hookups and meter installations
• Reserve-fund contribution
• Legal fees, title insurance, disbursements
• Property tax and common-expense adjustments
• Worked example: $850,000 downtown Toronto suite
• Common risks and misunderstandings
• Closing-cost checklist
• Frequently asked questions

What closing costs mean for a pre-construction condo

Resale buyers close once. Pre-construction buyers close twice. The first close is interim occupancy: the building is habitable, you move in, and you pay a monthly occupancy fee (interest on the unpaid balance, estimated property tax, and estimated common expenses). Title has not transferred yet.

The second close is final closing. The condominium corporation has registered on title, your unit is a legal condominium, you sign the transfer, and your lender advances the mortgage. All of the taxes, government fees, builder adjustments, and legal costs land on this second close.

Everything in this guide refers to final closing unless it is explicitly labelled otherwise. Interim occupancy fees are covered separately in the interim occupancy fees in Ontario guide.

Land transfer tax in Toronto

Land transfer tax is the largest closing cost for most Toronto pre-construction buyers. The tax is charged twice: once by the Province of Ontario and again by the City of Toronto. Both tiers apply to the purchase price on title, not to your mortgage amount.

Ontario Land Transfer Tax rates

Per the Ontario Ministry of Finance:

| Portion of purchase price | 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 (residential with one or two single-family residences) | 2.5% |

Toronto Municipal Land Transfer Tax rates

The City of Toronto charges an additional tax on all Toronto transactions. The base tiers up to $2,000,000 mirror the provincial tiers. Effective January 1, 2024, the City added upper tiers for luxury properties:

| Portion of purchase price | 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% | | $2,000,000.01 to $3,000,000 | 2.5% | | $3,000,000.01 to $4,000,000 | 3.5% | | $4,000,000.01 to $5,000,000 | 4.5% | | $5,000,000.01 to $10,000,000 | 5.5% | | $10,000,000.01 to $20,000,000 | 6.5% | | Over $20,000,000 | 7.5% |

Toronto's revised luxury tiers apply to registrations that occur on or after January 1, 2024. Pre-construction buyers who signed before that date but close after that date should confirm which tariff applies with their lawyer.

First-time buyer rebates

A qualifying first-time buyer may receive:

• A rebate of up to $4,000 against Ontario Land Transfer Tax.
• A rebate of up to $4,475 against Toronto Municipal Land Transfer Tax.

Both rebates require the buyer to be at least 18 years old, occupy the property as a principal residence within nine months of closing, and never have owned a home anywhere in the world (spouses count too, during the period of the relationship). Investors, corporations, and buyers assigning the property before closing do not qualify.

Non-resident buyer speculation tax

Foreign buyers should confirm whether the Non-Resident Speculation Tax and the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act apply to their purchase. Both regimes have changed multiple times since 2022 and both carry meaningful penalties for missteps. A Canadian real estate lawyer should confirm eligibility and any exemption before signing.

[TAL'S PRACTICAL NOTE: Add a two-to-four-sentence observation from a real Toronto closing where a buyer misread the LTT tiers or missed a rebate. Include what you now ask lawyers to confirm before closing.]

HST on the purchase

Ontario pre-construction condos are new residential property, which is a taxable supply under the federal Excise Tax Act. HST at 13% applies to the purchase.

For an owner-occupier, the builder almost always prices the unit as "inclusive of HST net of the New Housing Rebate," assuming the buyer will qualify for the rebate and assign it to the builder. The rebate is the federal GST/HST New Housing Rebate combined with the Ontario portion. As of the CRA's current tables:

• The federal portion of the rebate is available on qualifying homes with a fair market value up to $450,000 and phases out above $350,000.
• The Ontario portion provides a rebate of up to $24,000 on the provincial 8% component, and is not phased out by price.

If you plan to occupy the unit yourself, the "price" on the front of the Agreement of Purchase and Sale is already net of the rebate. You will not receive a cheque and you will not pay HST separately at closing.

If you plan to rent the unit to a tenant instead of occupying it, the assignment to the builder no longer works. You will owe the full HST at closing (approximately $24,000 to $30,000 depending on price), then apply to CRA for the New Residential Rental Property Rebate using Form GST524 within two years. This is a large short-term cash draw and it is one of the most common sources of surprise for investor buyers who did not budget for it.

If you plan to assign the contract before closing, HST treatment on the assignment itself changed on May 7, 2022. All assignments of new-housing contracts are now taxable at 13% on the assignment fee for GST/HST purposes (with a limited exception for the recovery of the original deposit paid to the builder). Confirm HST treatment with a tax professional before pricing an assignment.

Development charges, education levies, and other builder adjustments

The Agreement of Purchase and Sale usually lists a number of "adjustments" the buyer must reimburse the builder for on closing. These are separate from the purchase price and separate from HST. The main items:

• Municipal development charges (DCs). These are levied by the City of Toronto under the Development Charges Act to fund infrastructure. The City periodically publishes indexed DC by-laws.
• Education development charges. Levied by the Toronto District School Board and the Toronto Catholic District School Board under the Education Act.
• Parkland dedication / cash-in-lieu. Levied by the City under the Planning Act.
• Community benefits charge. Also under the Planning Act.
• Section 37 or community-benefits contributions, where applicable.

Most Agreements will "cap" some of these charges at a specific dollar amount for the buyer. For example, the APS may cap development charges at $15,000. If the actual DC billed by the City is $22,000, the builder eats the first $15,000 and passes the $7,000 overage to the buyer at closing.

Two things to check in the APS:

1. Which specific charges are capped, and at what amounts.
2. Which specific charges are uncapped (buyer pays the full amount, whatever it becomes).

If the cap is low relative to current City rates, or if any item is uncapped, ask your lawyer whether the builder will agree to raise the cap during the cooling-off period. See the Ontario condo cooling-off period guide for what your lawyer can negotiate in the first ten days.

Development charges and builder adjustments are common enough to deserve their own explanation. See the development charges and builder adjustments guide for a full breakdown and negotiation checklist.

Tarion enrolment fee

Every new residential unit in Ontario must be enrolled with Tarion under the Ontario New Home Warranties Plan Act. The builder is legally required to pay the enrolment fee, but almost every Agreement of Purchase and Sale re-charges the fee to the buyer as an adjustment on closing. The enrolment fee scales with the sale price and is set out in Tarion's current fee schedule. For most Toronto condominium units the fee falls in the low hundreds to just over $1,000.

Buyers should verify the current amount against the Tarion fee schedule before closing. HST applies to the enrolment fee.

Utility hookups and meter installations

Buyers usually reimburse the builder for the cost of installing individual suite meters and activating service. Typical items in Toronto:

• Toronto Hydro connection and suite meter installation.
• Enbridge Gas connection where the unit has a gas appliance.
• Toronto Water sub-meter, where applicable.

The combined amount is usually $500 to $1,500 depending on the building and the metering arrangement. Toronto condominiums increasingly use a third-party bulk-metering provider (for example Wyse, Provident, Priority Submetering Solutions), in which case the cost may appear as a one-time activation fee.

Reserve-fund contribution

The Condominium Act, 1998 requires every Ontario condominium corporation to maintain a reserve fund for major repairs and replacement of common elements. New buyers pay a contribution to the reserve fund on first closing, usually equal to two months of the estimated common expenses for the unit. On a suite with an estimated monthly common expense of $550, the reserve-fund contribution is $1,100.

Legal fees, title insurance, disbursements

A Toronto real estate lawyer will typically charge:

• Legal fees: $1,500 to $2,500 for a straightforward final closing.
• Title insurance: $250 to $500 depending on price and policy.
• Disbursements (title searches, software fees, courier, teraview charges): $300 to $600.

The lawyer's total invoice is usually in the $2,000 to $3,500 range including HST for a standard suite. Complex closings (assignments, corporate purchasers, non-resident buyers) cost more.

Property tax and common-expense adjustments

The builder pre-pays a portion of realty taxes and building operating expenses. The buyer reimburses the pre-paid portion allocated to their unit and to the days from final closing to the next period boundary. This is a small number, usually a few hundred dollars, and it should be shown line-by-line on the statement of adjustments.

Worked example: $850,000 downtown Toronto suite

Assumptions for this example (all illustrative, not tied to any specific project):

• Purchase price: $850,000 for a 620 sq ft one-bedroom-plus-den suite in the Downtown Core.
• Purchaser: Canadian resident, first-time buyer, will occupy as principal residence.
• 20% deposit paid to the builder over the deposit schedule ($170,000 total).
• Mortgage: 25-year amortization at closing, remaining $680,000 balance.
• Estimated monthly common expense: $550 per month.
• APS caps: Development charges capped at $15,000. Education levies capped at $2,000. Utility hookups uncapped.
• Rates and rules checked against: Ontario Ministry of Finance LTT tables, City of Toronto MLTT by-law, Tarion fee schedule, CRA GST/HST New Housing Rebate publications as of July 2026.

Combined land transfer tax (before FTHB rebate):

| Tier | Portion | Rate | Ontario LTT | Toronto MLTT | | --- | --- | --- | --- | --- | | $0 to $55,000 | $55,000 | 0.5% | $275 | $275 | | $55,000 to $250,000 | $195,000 | 1.0% | $1,950 | $1,950 | | $250,000 to $400,000 | $150,000 | 1.5% | $2,250 | $2,250 | | $400,000 to $850,000 | $450,000 | 2.0% | $9,000 | $9,000 | | Total (each tier) | | | $13,475 | $13,475 | | Combined LTT | | | | $26,950 | | First-time buyer rebate (Ontario, max $4,000) | | | −$4,000 | | | First-time buyer rebate (Toronto, max $4,475) | | | | −$4,475 | | Net combined LTT payable | | | | $18,475 |

Other closing costs on the same suite:

| Item | Illustrative amount | | --- | --- | | HST (assigned to builder, already in price) | $0 out-of-pocket | | Development charges overage above cap (assumes actual $22,000, cap $15,000) | $7,000 | | Education levies (within $2,000 cap) | $0 | | Tarion enrolment fee | $780 | | Utility hookups and meter activation | $1,200 | | Reserve-fund contribution (2 months × $550) | $1,100 | | Legal fees, title insurance, disbursements | $2,800 | | Property tax and common-expense adjustments | $600 | | Sub-total | | | Estimated total closing costs on top of the $850,000 price | $31,955 |

Investor variant of the same suite: the buyer would need to pay full HST at closing because the New Housing Rebate cannot be assigned to the builder. Add roughly $24,000 to $30,000 to the sub-total for the initial HST outlay, then plan on recovering the New Residential Rental Property Rebate portion in the months after closing via CRA Form GST524.

This example excludes appraisal fees, moving costs, insurance premiums, decor and window-covering purchases, monthly common expenses after closing, mortgage default insurance where applicable, and any variance in interest rate at final closing.

[TAL'S PRACTICAL NOTE: Add a two-to-four-sentence example from a recent Toronto pre-construction closing where the builder-adjustment total came in materially higher or lower than the buyer expected, and describe what tipped the number.]

Common risks and misunderstandings

• Assuming the sticker price is the "all-in" price. For owner-occupiers, HST is already netted. Land transfer tax, builder adjustments, Tarion, hookups, and legal fees are not.
• Missing the FTHB rebate deadline. The Toronto MLTT rebate is claimed by the lawyer at closing. If the paperwork is late, the buyer can still claim it after the fact, but Ontario rebates outside the closing window require a separate application to the Ministry of Finance.
• Under-budgeting development charges. Toronto DC rates have risen in successive by-laws. Older APS caps set in 2018 or 2019 do not reflect current City rates. Confirm the cap in your own APS.
• Investor cash-flow miscalculation. Paying full HST at closing and waiting on the NRRP rebate can strand $25,000 for six to twelve months. Financing this bridge is expensive if not planned.
• Assignment sales. HST on the assignment fee has been taxable since May 7, 2022. Older assignment playbooks that ignore this can cause a nasty CRA correspondence a year later.
• Assumed adjustments that are actually capped elsewhere. Some APS templates cap DCs and levies together, others separately. Read the specific list.
• Occupancy fees confused with mortgage payments. They are not principal-reducing. See the interim occupancy fees in Ontario guide for the mechanics.

Closing-cost checklist

Use this list when reviewing your APS and when speaking with your lawyer and lender.

• [ ] Confirm the resident, first-time buyer, and occupancy status affecting land transfer tax rebates.
• [ ] Calculate combined Ontario and Toronto MLTT for your specific purchase price using current tables.
• [ ] Confirm the HST treatment (owner-occupier vs investor) and the resulting cash requirement.
• [ ] List every "adjustment" the APS allows the builder to charge on closing.
• [ ] Note the dollar cap on each adjustment. Flag uncapped items.
• [ ] Ask the builder in writing to raise low caps during the ten-day cooling-off period, where possible.
• [ ] Ask your lawyer to confirm the Tarion enrolment fee and the current schedule.
• [ ] Ask the property-management or builder representative for the estimated monthly common expense and calculate two months for the reserve-fund contribution.
• [ ] Get a written legal-fee quote that includes disbursements and title insurance.
• [ ] Ask the lender for a written mortgage estimate that reflects the closing date and the current qualifying rate.
• [ ] Confirm whether the Non-Resident Speculation Tax and the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act affect you.
• [ ] Reserve enough cash to cover HST at closing if you will not occupy the unit.
• [ ] Verify the appraisal number the lender is using. Pre-construction appraisals sometimes come in below the contracted purchase price when the market has softened.

Frequently asked questions

How much are closing costs on a pre-construction condo in Toronto?

Budget 3% to 5% of the purchase price on top of the sticker price for a resident owner-occupier, and closer to 6% to 8% for an investor who must fund HST at closing before claiming the NRRP rebate. On an $850,000 suite the resident FTHB estimate above lands near 3.8% of the price. Numbers move with the specific APS caps and the type of buyer.

Do I pay HST separately on a pre-construction condo?

Owner-occupiers who assign the New Housing Rebate to the builder typically pay no HST separately. The sticker price is inclusive. Investors and non-occupying buyers pay HST at closing and later apply for the New Residential Rental Property Rebate through CRA Form GST524.

What is the biggest surprise on a Toronto pre-construction closing?

Development-charge overages. The APS sets a cap, and if the City's DC by-law has risen since the cap was written, the difference lands on the buyer's statement of adjustments.

Is the Tarion enrolment fee mine to pay?

The builder pays it to Tarion. Almost every APS re-charges the fee to the buyer as an adjustment on closing. The amount is set out in Tarion's current fee schedule.

Can I get first-time buyer rebates on a Toronto pre-construction condo?

Yes, if you meet the eligibility criteria for both the provincial and municipal rebates. The rebates reduce combined LTT by up to $8,475. Your lawyer applies for both at closing.

Are legal fees higher for pre-construction closings?

Slightly. Pre-construction closings involve a longer statement of adjustments and often a title-registration timing check. Expect a modest premium versus a standard resale closing.

Do I pay closing costs at interim occupancy or at final closing?

At final closing. Interim occupancy involves monthly occupancy fees only, not closing costs.

What happens to closing costs if I assign the contract before closing?

You do not pay the buyer-side closing costs because you never close. You do pay HST on the assignment fee, capital-gains reporting to CRA, and any assignment consent fees charged by the builder. See the Ontario condo assignment sale guide.

Conclusion

Closing costs on a Toronto pre-construction condo are not exotic, but they add up. Land transfer tax and builder adjustments do most of the damage. The single best hour a buyer can spend is with a real estate lawyer during the ten-day cooling-off period, going line by line through the APS to identify uncapped adjustments and to negotiate caps where the builder will accept them. That same hour also confirms whether the buyer's HST situation is going to require a large cash outlay on closing.

Call to action

Planning to purchase a Toronto pre-construction condo? CondoWizard can help you compare current projects, review deposit and adjustment structures across developers, and connect you with a lawyer who focuses on Ontario pre-construction closings. Contact the team before you sign.

Sources and last reviewed

• Ontario Ministry of Finance. Land Transfer Tax. https://www.ontario.ca/document/land-transfer-tax
• City of Toronto. Municipal Land Transfer Tax (MLTT). https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/
• Canada Revenue Agency. GST/HST New Housing Rebate. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028.html
• Canada Revenue Agency. New Residential Rental Property Rebate (Form GST524). https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/gst524.html
• Tarion. Enrolment fees and Statement of Critical Dates. https://www.tarion.com
• Condominium Authority of Ontario. Reserve fund and common expenses. https://www.condoauthorityontario.ca
• Government of Ontario. Condominium Act, 1998. https://www.ontario.ca/laws/statute/98c19
• City of Toronto. Development Charges By-Law. https://www.toronto.ca/city-government/planning-development/development-charges/

Last reviewed: 2026-07-25. Rules, tax rates, and Toronto by-laws change. Buyers should verify current information with the appropriate professional and official authority before closing.