A builder’s agreement is written by the builder, runs to dozens of pages and can bind you for years before you get the keys. The rules around it are also changing: Ontario’s HST relief for new homes was expanded in 2026 and a cooling-off period for new freehold homes starts in 2027. An Ontario real estate lawyer at Law Wise reviews new construction and pre-construction condominium agreements for buyers across the entire GTA and Ontario, from its office in Mississauga.
The cooling-off period
A cooling-off period is a short time after signing in which a buyer can cancel for any reason and get the deposit back. It is the right time for a lawyer to review a builder’s agreement, because you can still walk away or ask for changes.
Cooling-off periods at a glance
- New condominium units: 10 days. The period runs from the latest of the day you receive the disclosure statement, the day you receive the condominium guide, and the day you receive a copy of the agreement signed by you and the builder.
- New freehold homes, agreements signed before 1 January 2027: no cooling-off period under Ontario law. Any right to cancel must be written into the agreement.
- New freehold homes, agreements signed on or after 1 January 2027: 10 days, under a rule that comes into force on that date. Homes on vacant land condominium units and on parcels tied to a common elements condominium are excluded.
- Notice of cancellation must be in writing and must reach the builder or the builder’s lawyer within the 10 days. The builder must then refund your money with interest.
Sources: Condominium Act, 1998, SO 1998, c 19, s 73; New Home Construction Licensing Act, 2017, SO 2017, c 33, Sch 1, s 53.2 and O Reg 290/26 (not in force until 1 January 2027), as they read on 10 October 2026.
A condominium buyer has a second right to cancel later if the builder makes a material change to the disclosure statement, meaning a change important enough that a reasonable buyer would not have signed. That right also lasts 10 days.
What to check in a builder’s agreement
- Closing adjustments. Builders add charges on closing for items such as development charges, education levies, utility meters and connections. In many agreements the amounts are left open. Ask for a cap on each one.
- Critical dates. The Tarion addendum attached to the agreement sets the closing or occupancy dates and how far the builder may extend them.
- Early termination conditions. The builder may be allowed to cancel the project if, for example, it does not reach a sales target or obtain financing by a set date.
- Assignment. Most agreements forbid selling your contract to someone else without the builder’s written consent, and many charge a fee. See property assignment.
- What is included. Finishes, upgrades, appliances, parking and storage, and any rented equipment such as a water heater.
- HST. Whether the price includes HST, and who is to receive the rebates.
Interim occupancy in a new condominium
In a new condominium building you usually move in before you own your unit. Ownership can be transferred only after the condominium corporation is registered, and the time in between is the interim occupancy period. During it you pay the builder a monthly occupancy fee. By law the fee cannot be more than the total of interest on the unpaid balance of the price at the prescribed rate, an estimate of the municipal taxes for the unit, and the projected common expenses.
The occupancy fee is not a mortgage payment and does not reduce what you owe. A shorter interim occupancy period is therefore better for the buyer.
HST and rebates on new homes in 2026
HST of 13% applies to a newly built home. Builders usually quote a price that includes HST and assumes the buyer qualifies for rebates that are assigned to the builder. The rebates changed in 2026:
- Ontario’s temporary enhanced rebate. For agreements signed from 1 April 2026 to 31 March 2027, the Ontario rebates together cover the 8% provincial part of the HST, up to $80,000, on homes priced up to $1 million. The relief is a flat $80,000 from $1 million to $1.5 million, is reduced above that, and ends at $1.85 million.
- Ontario New Home Affordability Payment. Buyers who receive the enhanced rebate may also receive up to $50,000, equal to the 5% federal part, on the same price scale. No separate application is needed. Ontario describes the combined relief as up to $130,000.
- Federal first-time home buyers’ rebate. Up to $50,000 of the federal part on homes up to $1 million, reduced to nil at $1.5 million, for agreements signed on or after 20 March 2025.
- Ontario new housing rebate. The long-standing rebate of up to $24,000 continues where the temporary relief does not apply.
The home must be the primary place of residence of the buyer or a close relative, and construction must start and finish by set dates. An agreement signed before 1 April 2026 does not qualify for the enhanced rebate because it is later changed or assigned. If you will rent the home out, different rebates and rules apply. The buyer is responsible for being eligible, and a buyer who is not must repay the rebate, so check before you sign.
Tarion warranty and deposit protection
Every new home in Ontario comes with a warranty that the builder provides and Tarion backs. Builders and vendors of new homes must be licensed. The warranty has three parts:
- One year: defects in work and materials, Ontario Building Code violations, unauthorized substitutions and fitness to live in.
- Two years: water penetration, exterior cladding, the electrical, plumbing and heating distribution systems, and Building Code violations that affect health and safety.
- Seven years: major structural defects.
For agreements signed on or after 1 July 2023, Tarion lists maximum coverage of $400,000 for a freehold home and $300,000 for a condominium unit.
Deposits. For a freehold home, Tarion protects up to $60,000 if the price is $600,000 or less, or 10% of the price to a maximum of $100,000 if it is higher. For a condominium unit, the deposit must be held in trust under the Condominium Act, 1998, and Tarion protects up to $20,000 on top of that. Buyers of new freehold homes who sign on or after 1 April 2026 are asked to register the purchase with Tarion within 45 days. Buyers who register on time qualify for the maximum deposit coverage, and Tarion has said that late or missing notice can reduce it. Your lawyer can give the notice for you.
Delays. If the builder misses the firm closing or occupancy date, compensation of up to $7,500 is payable, including $150 a day for living expenses. If the home is still not ready by the outside date in the addendum, you have 30 days in which to end the agreement and recover what you paid, with interest.
How Law Wise helps
- reviews the builder’s agreement, disclosure statement and Tarion addendum inside the cooling-off period
- asks the builder’s lawyer for caps on adjustments and for other changes you need
- explains the HST rebates that apply to your purchase and what you must do to keep them
- registers your purchase with Tarion where notice is required
- acts on the interim occupancy closing and the final closing, and reviews the statement of adjustments
Your file is handled by a Law Wise lawyer licensed by the Law Society of Ontario. Service is available in English, Urdu, Punjabi and Hindi, and, if you retain the firm, fees are explained and confirmed in writing before work starts.
Common questions about new construction purchases
Do I need a lawyer before I sign with a builder, or only at closing?
The useful time is before you are bound. Once a cooling-off period ends, or if there is none, the agreement stands as written and the lawyer’s work is to close it. Bring the agreement in as soon as you receive it.
Can I cancel a pre-construction condo agreement after the 10 days?
Only if the law or the agreement gives you a way out. Examples are a material change to the disclosure statement, a delay past the outside occupancy date, or the builder ending the project under an early termination condition. Otherwise the agreement is binding.
Is there a cooling-off period for a new freehold house?
Not for agreements signed before 1 January 2027. For agreements signed on or after that date, Ontario gives buyers of most new freehold homes 10 days to cancel.
How is my deposit protected if the builder fails?
Condominium deposits must be held in trust, and Tarion adds protection of up to $20,000. For a freehold home Tarion protects up to $60,000, or 10% of the price to a maximum of $100,000 where the price is over $600,000. Register a new freehold purchase with Tarion within 45 days.
Do I pay HST on a new home in Ontario?
HST applies, but in 2026 the rebates can cover all of it on a home priced up to $1 million that will be your primary residence, if the agreement is signed between 1 April 2026 and 31 March 2027 and the other conditions are met. Relief shrinks above $1 million and ends at $1.85 million.
The builder has delayed my closing. What can I do?
Read the statement of critical dates at the front of the Tarion addendum. It shows whether the builder gave proper notice, whether compensation is owed and when your right to end the agreement begins. Claims for delay compensation have deadlines, so get advice promptly.
Signing with a builder?
Bring us the agreement while the cooling-off period is still running. The first consultation is free for 15 minutes, by appointment.
This page is general legal information for Ontario, current as of 10 October 2026. It is not legal advice and does not create a lawyer-client relationship. For advice about your situation, please speak with a lawyer.