Buying Pre-Construction in Ontario: What You Don’t See on the Price Tag

Written by: Oviya Sugunakumar
Date: October 21, 2025

Buying a pre-construction home in Ontario is an exciting milestone. However, before you sign your agreement, it’s important to understand that the final cost of your new home can be higher than the price you see advertised. Many buyers are surprised by extra costs that show up at closing, known as “closing adjustments.” Understanding how this work, and how the HST rebate affects your purchase price, can help you plan ahead and avoid unpleasant surprises.

When builders advertise pre-construction homes, the sale price almost always includes the HST rebate. This rebate is a government incentive that helps make new homes more affordable. Builders apply the rebate upfront and deduct it from the total price; but that discount only applies if you qualify. If you’re buying the home as your primary residence, or if an immediate family member (like a parent or child) will be living there, you’ll likely qualify. If you’re purchasing the property as an investment or planning to rent it out, the builder won’t be able to claim the rebate on your behalf. In that case, the rebate amount which often ranges around $24,000 to $30,000, will be added back to your purchase price at closing. That means the price of your new home can suddenly go up, and you’ll need to budget for that extra cost.

When your home is ready for closing, you’ll receive a document called the Statement of Adjustments. Think of it as the builder’s final bill which shows the remaining balance on your home and all the additional costs you’re responsible for before getting the keys. These adjustments can include development charges, utility connection fees, Tarion warranty enrollment fees, meter installation fees, and administrative or legal costs charged by the builder. They’re often not included in the advertised sale price, and together they can add several thousand dollars to your total.

Because many of these details are buried in the fine print of your purchase agreement, it’s important to have a real estate lawyer review everything before you sign. A lawyer can help you understand what’s included in your purchase price, identify potential extra costs, and confirm whether you qualify for the HST rebate or need to budget for it at closing.

​Buying a pre-construction home can be a rewarding investment, but it’s easy to overlook hidden costs along the way. Having an experienced lawyer on your side ensures you’re protected, your budget is realistic, and your closing day comes with peace of mind — not surprises. Our real estate team at Theva Law is here to guide you through every step of the process and help safeguard your investment.