Pre-Construction Condo Deposit Structures in Ontario

Most Ontario pre-construction condo deposits follow a familiar rhythm: 5% on signing, 5% in 30 to 60 days, 5% in six months, and 5% in a year. For a Canadian resident buyer that adds up to about 20% of the purchase price before final closing. Non-residents typically pay 35%. Every dollar is either held in a trust account under section 81 of the Condominium Act, 1998 or covered by security accepted by Tarion. The specific dates, the exact percentages, and which items the deposit can be negotiated on vary meaningfully between builders and between projects. A buyer who understands the standard menu can usually get one or two things adjusted in their favour during the ten-day cooling-off period.

Key takeaways

• The typical Ontario deposit total for a resident buyer is 15% to 20% of the purchase price, paid over 12 to 24 months.
• Non-resident buyers usually pay 35% total.
• Every deposit dollar is either sitting in a trust account under the Condominium Act or is covered by Tarion-approved security (letter of credit, surety bond, or excess-deposit insurance).
• Tarion provides prescribed deposit protection up to a maximum amount that the buyer should verify against the current Tarion schedule.
• The final 5% is often paid at interim occupancy rather than earlier, freeing cash for buyers who are counting on savings growth or on future income to fund it.
• Investors, extended-family purchasers, and non-residents should structure the deposit and the ownership entity together with an accountant and a lawyer before signing.

Table of contents

• What "deposit structure" actually refers to
• A typical resident deposit schedule in 2026
• Extended and reduced deposit schedules
• Non-resident deposit schedules
• How deposit protection works in Ontario
• Where the money physically sits
• Interest on deposits
• Deposit financing options
• What a buyer can negotiate
• Common risks and misunderstandings
• Deposit checklist
• Frequently asked questions

What "deposit structure" actually refers to

The deposit structure is the schedule of instalments the buyer must pay to the builder between signing the Agreement of Purchase and Sale and final closing. It is separate from the balance due on closing (which is usually covered by a mortgage), separate from HST, and separate from closing adjustments.

The deposit schedule appears on the front page of the APS and is typically stated as a series of percentages or dollar amounts tied to specific dates or specific triggers ("on signing," "30 days after signing," "on occupancy," and so on).

A typical resident deposit schedule in 2026

Most Toronto and GTA developers use a variation of this schedule for Canadian resident buyers:

| Milestone | Percentage of purchase price | Cumulative | | --- | --- | --- | | On signing | 5% | 5% | | 30 or 60 days after signing | 5% | 10% | | 180 days after signing | 5% | 15% | | 365 days after signing | 5% | 20% |

Some builders substitute the fourth instalment for a 5% payment at interim occupancy, in which case the buyer has only 15% deposited before occupancy and the final 5% comes out of cash flow when they take possession.

On an $850,000 suite, a resident deposit schedule of 20% totals $170,000 paid over the first year of the deal. That capital is illiquid from the date it is paid until final closing, which can be three to five years away depending on the project timeline.

Extended and reduced deposit schedules

Deposit structures are not identical across builders. Common variations:

• Extended schedules. Some builders offer 1% per month for 20 months, or 2.5% per quarter for two years. These help buyers who need more time to accumulate the deposit but are less common at launch and more common as inventory ages.
• Reduced deposit programs. A handful of projects run 10% total deposit promotions to move inventory, often on the more expensive suites or at the end of a sales cycle.
• First-time buyer promotions. Occasionally a builder will run a promotion that reduces the deposit to 10% or 15% for a specific buyer profile.
• Investor deposits. Some projects require a larger deposit from purchasers who intend to rent the unit, though this is not standard.
• Bulk-buyer deposits. Investor groups purchasing multiple units are sometimes offered a discounted deposit schedule.

Deposit structure is one of the strongest features to compare across projects when you are choosing between two similar developments. See the Toronto pre-construction condo listings for current inventory and the developer directory for the builders behind each project.

Non-resident deposit schedules

Buyers who are not Canadian residents for tax purposes typically pay 35% total, structured similarly:

| Milestone | Percentage of purchase price | Cumulative | | --- | --- | --- | | On signing | 10% | 10% | | 30 or 60 days | 10% | 20% | | 180 days | 10% | 30% | | 365 days | 5% | 35% |

Non-resident buyers should also consider:

• The Non-Resident Speculation Tax on Ontario purchases and its current scope.
• The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, currently in effect through at least 2027, and any applicable exemption.
• Additional HST cash-flow implications if the intent is to rent the unit after closing (see the HST on pre-construction condos guide).

A lawyer should confirm all of the above before signing.

How deposit protection works in Ontario

There are two layers of protection.

Layer 1: The Condominium Act, 1998. Section 81 of the Act requires deposit money received from purchasers of residential condominium units to be held in a trust account maintained at a Canadian bank, or to be covered by an approved security (letter of credit, bond, or accepted insurance). The trust obligation applies whether or not the project ultimately proceeds. Trust funds are the buyer's money; the builder cannot use them until specific milestones have been reached and only in the manner the Act permits.

Layer 2: Tarion deposit protection. Under the Ontario New Home Warranties Plan Act, Tarion provides deposit protection on residential condominium units up to prescribed maximums. If the builder becomes insolvent or the project is cancelled and the trust funds are inadequate for any reason, Tarion pays out up to the prescribed limit per unit. The exact maximum should be verified against the current Tarion schedule; the amount has been updated periodically.

For deposits above the Tarion limit, the builder is required to provide additional security. The most common form is excess-deposit insurance issued by a licensed insurer, with a certificate delivered to the buyer's lawyer. If a buyer's deposit exceeds the Tarion maximum and no certificate is provided, the lawyer should raise it during the cooling-off period.

Where the money physically sits

Deposit cheques and wires are made payable to the builder's real estate lawyer, in trust. The lawyer holds the funds in a designated trust account. The buyer receives (through their own lawyer) a written acknowledgement of deposit and, where applicable, a copy of the excess-deposit insurance certificate.

The builder cannot access the trust funds until specific statutory or contractual milestones. In practice, funds are released to the builder against construction progress and against securities that satisfy the Act. Your lawyer can explain the specific release schedule for your APS.

Interest on deposits

Ontario Regulation 48/01 under the Condominium Act sets the rate of interest that must be paid to purchasers on deposits held. The rate is tied to a prescribed formula and updates periodically. The interest is paid to the buyer either at final closing or is credited against the balance owing.

The prescribed rate is generally lower than what the same funds could earn in a high-interest savings account, so the interest is best treated as a small compensation for the loss of liquidity rather than an investment yield.

Deposit financing options

Some buyers use borrowed money to fund the deposit schedule. Common approaches:

• Home Equity Line of Credit (HELOC) on another property. Interest is at variable rates.
• Deposit loan programs from specific lenders. These are uncommon in Ontario for individual purchases and usually only offered to established investors.
• Family loans documented properly. Care must be taken to comply with anti-money-laundering rules and to have the source of funds disclosed to the builder's lawyer.
• RRSP Home Buyers' Plan. Only available to first-time buyers for owner-occupied purchases and only for the actual purchase, not for the pre-construction deposit schedule per se, though funds withdrawn under the HBP can be used to top up deposits.

Anyone using borrowed funds should model the total cost of financing over the full period until final closing, not just the near-term monthly payment.

[TAL'S PRACTICAL NOTE: Add a two-to-four-sentence observation about a Toronto pre-construction buyer who used a HELOC or family loan for deposits and how you would advise buyers to think about the trade-off today.]

What a buyer can negotiate

Not every builder will negotiate. Larger, well-known builders in strong launches negotiate very little. Smaller builders, weaker launches, or aged inventory offer more flexibility. Common negotiation levers during the ten-day cooling-off period:

• Stretched deposit schedule. Ask for the second instalment at 90 days rather than 30 days, or the third at 12 months rather than six.
• Reduced deposit on signing. Some builders will accept 3% or 4% on signing instead of 5% if the buyer wires the second instalment on a very short timeline.
• Higher adjustment caps. Ask for higher caps on development charges, education levies, and Tarion enrolment (see the pre-construction closing costs guide).
• Right of assignment without consent fee, or with a reduced consent fee.
• Parking or locker inclusion.
• Decor credits.
• Extended right to select finishes.
• Interim occupancy fee cap.
• Cooperating-realtor rebate acknowledgement or realtor incentive credit.

Any negotiated change must be documented as a written amendment to the APS, signed by both parties and returned to the buyer within the cooling-off period.

Common risks and misunderstandings

• "The deposit is 100% guaranteed." The Condominium Act protects the deposit in trust and Tarion provides insurance up to a prescribed maximum. Above the maximum, verify the excess-deposit certificate.
• "The builder can use my deposit for construction." The builder can only draw on the trust funds in the manner the Act permits, typically against construction progress and security.
• "I can get my deposit back if I change my mind." Only during the ten-day cooling-off period. After that, cancellation rights are limited to what the APS and the Tarion Addendum specify.
• "I can assign the deal to my brother in law before closing to avoid HST." Assignments are subject to builder consent (usually with a fee) and HST on the assignment fee is taxable as of May 7, 2022 per CRA.
• "The deposit schedule is fixed and non-negotiable." Occasionally true at launch. More often negotiable, at least at the margins.
• "The interest on the deposit will meaningfully reduce my cash need." Prescribed interest rates are modest. Do not build a plan around deposit interest as a return.
• "If the project cancels I get my full deposit back the same week." Tarion payouts follow their claim process and take time. Trust-account releases require a court order in a cancelled project.

Deposit checklist

• [ ] Written deposit schedule with specific dates or triggers on the APS.
• [ ] Cheques or wires made payable to the builder's real estate lawyer, in trust.
• [ ] Written acknowledgement of each deposit received from the trust lawyer.
• [ ] Confirmation that the total deposit is within Tarion's prescribed limit, or an excess-deposit insurance certificate covering the excess.
• [ ] Confirmation from your lawyer that deposit money is being held in trust as required by section 81 of the Condominium Act.
• [ ] Deposit funding plan (savings, HELOC, family loan) documented and verified against anti-money-laundering source-of-funds requirements.
• [ ] If non-resident, confirmation of Non-Resident Speculation Tax exposure and eligibility under the federal foreign-buyer regime.
• [ ] Any negotiated adjustments to the deposit schedule documented in a written amendment signed during the cooling-off period.

Frequently asked questions

How much deposit do I need for a Toronto pre-construction condo?

Canadian residents usually pay 15% to 20% of the purchase price, paid in scheduled instalments over 12 to 24 months. Non-residents typically pay 35%.

Is my deposit safe if the builder cancels the project?

Deposits are held in trust under the Condominium Act, 1998 and are covered up to Tarion's prescribed limit under the Ontario New Home Warranties Plan Act. Amounts above the Tarion limit should be covered by an excess-deposit insurance certificate.

Can I negotiate the deposit schedule?

Often, yes, especially with smaller builders or on aged inventory. Any negotiated change must be a written amendment during the ten-day cooling-off period.

Do I earn interest on my deposit?

Yes, at the prescribed rate under Ontario Regulation 48/01. The rate updates periodically and is usually credited at final closing.

Can I use RRSP money for the deposit?

The RRSP Home Buyers' Plan allows first-time buyers to withdraw up to the current HBP limit from their RRSP toward a qualifying home purchase. The funds are typically applied to the down payment at closing, but eligible buyers may withdraw HBP funds at various points in the process. Confirm the timing and eligibility with a qualified advisor.

What happens to my deposit at final closing?

The deposit and accrued interest are credited against the purchase price on the statement of adjustments. The buyer's mortgage plus any additional cash covers the remaining balance and the closing costs.

Can the builder move the deposit dates?

Only if the APS gives them that right. The dates on the APS are contractual and both sides are bound.

Are non-Canadian purchaser deposits treated the same as Canadian deposits?

Trust and Tarion protections apply to both. However, non-resident buyers have additional tax and eligibility exposures that a resident buyer does not.

Conclusion

Deposit structure is one of the most important parts of a pre-construction APS. It sets the timing of your largest cash outflows for the next one to two years, determines how much of your capital is illiquid, and interacts with your tax and financing plan. A buyer who reads the schedule carefully, verifies deposit protection, and uses the cooling-off period to negotiate any accommodations they need is much less likely to be surprised later.

Call to action

Comparing deposit structures across Toronto pre-construction projects? Browse current listings on CondoWizard, see developer track records, or contact the team to be walked through the deposit schedule of any specific project before you sign.

Sources and last reviewed

• Government of Ontario. Condominium Act, 1998. https://www.ontario.ca/laws/statute/98c19
• Tarion. Deposit protection and the Statement of Critical Dates. https://www.tarion.com
• Government of Ontario. Ontario Regulation 48/01 (deposit interest). https://www.ontario.ca/laws/regulation/010048
• Canada Revenue Agency. GST/HST New Housing Rebate and assignment sales. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028.html
• Ministry of Finance Ontario. Non-Resident Speculation Tax. https://www.ontario.ca/document/non-resident-speculation-tax
• Government of Canada. Prohibition on the Purchase of Residential Property by Non-Canadians Act. https://laws-lois.justice.gc.ca

Last reviewed: 2026-07-25. Deposit rules, prescribed rates, and Tarion limits update periodically. Buyers should verify current information with the appropriate professional and official authority before signing.