Quick answer: Starting January 1, 2027, buyers of new freehold homes in Ontario get a 10-day cooling-off period. This covers new detached homes, semis and freehold townhomes bought from a builder. During those 10 days you can cancel your agreement for any reason, without penalty, and get your deposit back. The 10 days don't start until you've received the fully signed agreement and the new government information sheet and addendum. Condo buyers already have this right.
For years, Ontario's new home rules had a gap. Someone buying a pre-construction condo could walk away within 10 days. Someone buying a new detached home or freehold townhome, often a bigger purchase, had no such right. In hot markets, some freehold buyers were given as little as 24 hours. That changes on January 1, 2027.
What is changing on January 1, 2027?
The Homeowner Protection Act, 2024 added a 10-day cooling-off period for new freehold homes to the New Home Construction Licensing Act. The government filed the rules that put it into effect in August 2026: O. Reg. 290/26, which covers the cooling-off period, and O. Reg. 289/26, which covers the new addenda and information sheets. Both take effect on January 1, 2027.
| Before Jan 1, 2027 | From Jan 1, 2027 | |
|---|---|---|
| New condo buyers | 10-day cooling-off (Condominium Act) | No change, still 10 days |
| New freehold buyers | No legal cooling-off period | 10-day cooling-off period |
| Resale buyers | No cooling-off period | No change, still none |
Who gets the new freehold cooling-off period?
Buyers of new freehold homes purchased from a builder, such as:
- Detached homes
- Semi-detached homes
- Freehold townhomes
It does not apply under the new rules to homes on a vacant land condominium unit or on a parcel of tied land (POTL) for a common elements condominium. Those purchases already fall under the Condominium Act's cooling-off rules. Resale homes are not covered at all.
When does the 10-day clock start?
Not necessarily on the day you sign. The 10 days start once you've received all of the following:
- A copy of the fully signed agreement of purchase and sale
- The new government-prescribed information sheet for new home buyers
- The updated addendum required under the new regulations
Tarion has said the information sheet and addendum must be completed and included in the agreement before it can bind the buyer and before the 10-day period begins. If the builder hasn't given you these documents, the clock hasn't started.
How do I cancel during the cooling-off period?
- Give the builder written notice that you're rescinding the agreement, within the 10 days. A phone call or a conversation at the sales office isn't enough.
- Keep proof of when and how you delivered it.
- Your deposit is returned. Ask your lawyer how and when the refund is handled under your agreement.
You don't need to give a reason.
What does this mean if you're buying before January 1?
If you sign a freehold agreement in 2026, the new cooling-off period generally won't apply to it. To protect yourself:
- Ask for a lawyer's review condition (often 3–10 days) to be written into the agreement
- Get your mortgage pre-approval before you sign
- Read the closing cost schedule and HST clause before your deposit is due
Builders in a slower 2026 market are often willing to agree to a review period. Ask before you sign.
There's also a timing decision. The expanded HST rebate only applies to agreements signed by March 31, 2027. Buyers who sign between January 1 and March 31, 2027 get both the new cooling-off protection and the rebate window.
How to use your 10 days well
- ☐ Book a pre-construction lawyer before you sign, so your review happens inside the window
- ☐ Confirm your mortgage pre-approval in writing
- ☐ Check the cap on development charges and levies
- ☐ Read the HST clause: what you owe if you don't qualify for the rebate
- ☐ Check the deposit schedule and the occupancy dates (firm and outside dates)
- ☐ Check the assignment rules and fees, in case you need to sell before closing
- ☐ Register your agreement with Tarion within 45 days to protect your full deposit coverage
Related reading: Pre-Construction Deposits in Ontario · How to Buy Pre-Construction in Ontario · Pre-Construction Closing Costs
Frequently asked questions
Is there a cooling-off period for new homes in Ontario?
Yes. New condo buyers have had a 10-day cooling-off period under the Condominium Act for years. Starting January 1, 2027, buyers of new freehold homes (detached, semis and freehold towns bought from a builder) get one too.
When does the freehold cooling-off period start?
It takes effect on January 1, 2027. For each purchase, the 10 days start once you've received the fully signed agreement and the government-prescribed information sheet and addendum.
Does the cooling-off period apply to resale homes?
No. Ontario has no cooling-off period for resale homes. Once a firm resale agreement is signed, you're committed.
Do I get my full deposit back if I cancel?
Cancelling within the cooling-off period lets you walk away without penalty, and the deposit is returned. Confirm the refund timing and details with your lawyer.
I signed a freehold agreement in 2026. Do I get the 10 days?
Generally, no. The new rules apply from January 1, 2027. Agreements signed before then depend on whatever conditions were negotiated into the contract.
Does it apply to townhomes on a common elements condo (POTL)?
Those purchases are excluded from the new freehold rules because they already fall under the Condominium Act's cooling-off provisions. Ask your lawyer which rules apply to your specific home.
About the author: Ola Otubu is a REALTOR® with Realty ONE Group Reveal, Real Estate Brokerage, and the founder of Buyprecon.ca. He represents buyers of new construction homes and condos across Ontario, from the first deposit through PDI, closing and warranty claims.
This article is general information, not legal advice. The rules take effect January 1, 2027 and may be clarified by further guidance. Have a real estate lawyer review your agreement. Sources: Homeowner Protection Act, 2024; O. Reg. 289/26 and O. Reg. 290/26 under the New Home Construction Licensing Act, 2017; Tarion; Condominium Act, 1998.
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