Buying a pre-construction home is fundamentally different from buying a resale property. You are purchasing something that does not yet exist, based on architectural plans, renderings, and a builder's track record. For many buyers, particularly first-timers, this process can feel unfamiliar.
This guide walks through each stage of the pre-construction buying process in Ontario, with a focus on the protections available to buyers and the decisions that matter most.
Step 1: Research and Registration
Before any community opens for sales, builders typically offer a registration period. Registering does not commit you to anything -- it places you on a priority list to receive information about pricing, floor plans, and sales events before the general public.
During this phase, research the builder. The Home Construction Regulatory Authority (HCRA) of Ontario maintains a public registry where you can verify a builder's licence status and review any complaints or conditions. All builders and vendors of new homes in Ontario must be licensed by the HCRA.
If you are exploring the Orillia, Muskoka, and Simcoe County corridor, our communities page provides an overview of available and upcoming projects across the region.
Step 2: The Sales Event
Most pre-construction communities launch with a sales event or opening, during which buyers can select from available lots and floor plans. Some builders operate a sales centre with model suites or renderings; others may hold the event at a temporary location.
At this stage, you will typically:
- Review available floor plans and pricing
- Select a lot (location within the community)
- Choose any structural upgrades or premium finishes
- Sign an Agreement of Purchase and Sale (APS)
Step 3: The Agreement of Purchase and Sale
The APS is the legal contract between you and the builder. It is a complex document that covers the purchase price, deposit schedule, estimated closing date, included features, and terms of the sale. In Ontario, pre-construction APS documents also include a Tarion Addendum that outlines warranty coverage and closing date protections.
Have a lawyer review the APS before you sign. A real estate lawyer experienced in new construction can explain clauses that may not be immediately clear, including:
- Cap on development charges (or lack thereof)
- Builder's right to substitute materials or finishes
- Conditions under which the builder can terminate the agreement
- How interim occupancy works (for condo purchases)
- Assignment clause (your right to sell the contract before closing)
Step 4: The Cooling-Off Period
Ontario law provides a 10-calendar-day cooling-off period for pre-construction home purchases. During this time, you can cancel the agreement for any reason and receive a full refund of any deposits paid.
The cooling-off period begins the day after you receive a signed copy of the APS. Use this time to:
- Have your lawyer review the full agreement
- Confirm your mortgage pre-approval covers the purchase price
- Research the builder's history with the HCRA
- Visit the community site if possible
If you decide to cancel during the cooling-off period, you must notify the builder in writing. Your deposits must be returned in full.
Step 5: Deposits
Pre-construction deposits are typically structured in instalments paid over several months following the signing of the APS. The total deposit usually amounts to 15 to 20 percent of the purchase price, though the exact schedule varies by builder.
Key points about deposits:
- Make cheques payable to the builder's lawyer in trust, not directly to the builder. This provides an additional layer of protection.
- Deposits are protected under the Ontario New Home Warranties Plan Act, administered by Tarion. If the builder fails to complete the project, you are eligible for deposit recovery.
- Interest: In Ontario, builders are generally not required to pay interest on deposits unless the APS specifically provides for it.
Step 6: Construction and Communication
After deposits are complete, the builder constructs the home. The construction period for a pre-construction home in the Orillia-Muskoka corridor typically ranges from 12 to 24 months, depending on the type of home and the community's development timeline.
Communication during construction varies by builder. Some provide regular email updates with photos; others communicate only at key milestones. If communication is important to you, ask about the builder's approach during the sales process.
Step 7: Pre-Delivery Inspection (PDI)
Before closing, you and the builder will conduct a Pre-Delivery Inspection of the completed home. This is a formal process required by Tarion in which you walk through the home and document any deficiencies -- items that do not meet the agreed specifications or Ontario Building Code requirements.
Tips for the PDI:
- Bring the original floor plan and list of included features and upgrades
- Test all fixtures, outlets, windows, and doors
- Check for cosmetic defects in flooring, walls, countertops, and cabinetry
- Document everything in writing on the Tarion PDI form
- Consider hiring a professional home inspector to accompany you
Items documented during the PDI become part of your Tarion warranty claim and the builder is obligated to address them.
Step 8: Closing
Closing on a new construction home involves several costs beyond the remaining balance of the purchase price:
- Ontario Land Transfer Tax: Calculated on a sliding scale based on the purchase price
- HST: New homes are subject to HST, though the Ontario New Housing Rebate can reduce this cost significantly
- Legal fees: Your lawyer will handle the title transfer, mortgage registration, and closing adjustments
- Utility connections: One-time fees for connecting water, hydro, gas, and other services
- Development charges: Some builders cap these in the APS; others pass through actual charges at closing
After You Move In: Warranty Coverage
Your new home is covered by Tarion warranty from the date of possession:
- Year 1: Defects in labour, materials, and Ontario Building Code violations
- Year 2: Distribution systems (plumbing, heating, electrical), exterior cladding, and water penetration
- Years 1-7: Major structural defects
Tarion provides specific timelines and forms for submitting warranty claims. Mark these dates on your calendar -- missing a submission deadline can affect your coverage.
Is Pre-Construction Right for You?
Pre-construction is well suited for buyers who:
- Want to choose their lot, floor plan, and finishes
- Have a flexible timeline (no urgent need to move)
- Are comfortable purchasing based on plans rather than a finished product
- Want to enter a new community at launch pricing
It may be less suitable for buyers who need to move quickly, prefer to see and touch the finished home before buying, or are uncomfortable with the uncertainties inherent in construction timelines.
If you are exploring pre-construction opportunities in the Orillia, Muskoka, and Simcoe County corridor, register for priority access to receive notifications as new communities launch.