Buying pre-construction in Ontario feels very different from ordering from the resale market. Instead of dropping a massive 20% down payment on closing day, developers typically require you to fund the project progressively through a "Deposit Structure."
What is a Standard Deposit Structure?
In the GTA and Waterloo Region, it is common to see a builder require a 15% to 20% total deposit staggered over 12 to 24 months before occupancy. A typical schedule for a $600,000 condo might look like this:
| Timeline | Amount Required | Running Total |
|---|---|---|
| On Signing | $10,000 | $10,000 |
| 30 Days | Balance to 5% | $30,000 |
| 180 Days | 5% | $60,000 |
| 365 Days | 5% | $90,000 |
| At Occupancy | 5% | $120,000 (20%) |
Can You Negotiate the Structure?
While prices on pre-construction are often fixed, deposit structures can be negotiated—especially in buyer's markets. If you have strong financing but limited immediate liquidity, you can ask for an "Extended Deposit Structure." Developers are highly motivated to secure sales to meet their financing quotas, making them amenable to spreading the 20% over 36 months instead of 18.
How Are Your Deposits Protected?
Handing over $100,000 to a developer who hasn't broken ground yet sounds terrifying. Thankfully, Ontario offers robust protections:
- Condominiums: Your deposit is held in a lawyer's trust account. If the project is cancelled, your money is returned. Under the Condominium Act, deposits are protected up to $20,000 directly by Tarion, and the remaining amount via the trust.
- Freehold Homes: Tarion protects deposits up to $100,000 for homes priced over $600,000.
The 10-Day Cooling Off Period
In Ontario, buying a new pre-construction condo grants you an automatic, mandated 10-day cooling-off period. During these 10 days, you can have a lawyer review the complex Agreement of Purchase and Sale, secure financing, and decide to walk away completely penalty-free. Your initial deposit cheque will be returned uncashed.