Quick answer: Pre-construction deposits in Ontario are paid in instalments rather than all at once. Condos commonly ask for 15–20% spread over 1–2 years, and freehold homes (detached, semis, freehold towns) often ask for less. Your deposit is protected:
- Freehold homes: Tarion covers deposits up to 10% of the price, with a minimum of $60,000 and a maximum of $100,000.
- Condos: deposits must be held in trust or insured, and Tarion backs the first $20,000.
- Cooling-off: condo buyers get a 10-day cooling-off period. Freehold buyers get one starting January 1, 2027.
The deposit is the moment pre-construction becomes real. It's also where most buyers have the most questions: How much do I need? What if the builder goes bankrupt? Can I change my mind? This guide answers each one in plain language.
How much is the deposit on a pre-construction home in Ontario?
There's no single legal amount. Each builder sets its own deposit structure in the agreement of purchase and sale (APS). The most common patterns:
| Home type | Typical total deposit | How it's usually paid |
|---|---|---|
| Pre-construction condo | 15%–20% of the price | A small amount on signing, then instalments at 30, 90, 180, 365+ days |
| Freehold townhome / semi / detached | Often 5%–10%, sometimes a fixed dollar amount | A few instalments over the first year |
| Launch or "platinum access" offers | Often reduced (e.g. 5%–10%) | Extended schedules are a common incentive |
These are typical market patterns, not rules. Always go by the schedule in your own APS.
Example: On a $650,000 condo with a 20% structure, you might pay $5,000 on signing, the balance of 5% in 30 days, 5% in 90 days, 5% in 180 days and 5% at occupancy. That's $130,000 total, but spread over years instead of paid up front. This staging is one of pre-construction's biggest advantages: it gives you time to save while the building goes up.
Negotiation tip: Deposit structures are one of the easiest things to improve, especially in a slower market like 2026. Lower deposits, longer gaps between payments, and capped closing costs are often easier to win than a price cut.
Is my pre-construction deposit safe if the builder goes bankrupt?
Ontario has two layers of protection, and they work differently for freehold homes and condos.
Freehold homes: Tarion deposit protection
If you buy a new freehold home (detached, semi or freehold townhouse) and signed your agreement on or after January 1, 2018, Tarion protects your deposit if the builder goes bankrupt or fundamentally breaches the agreement:
- Homes priced $600,000 or less: covered up to $60,000
- Homes over $600,000: covered up to 10% of the purchase price, to a maximum of $100,000
Payments for upgrades and extras, such as hardwood or quartz counters, count toward the same limit.
Important step for freehold buyers: Since July 1, 2025, you're encouraged to register your purchase agreement with Tarion within 45 days of signing. Buyers who register late still have coverage, but their claims come from a $10 million annual pool shared with all other late registrants. Registering takes a few minutes and protects your full coverage.
Condos: trust account plus Tarion
Condo deposits get two layers of protection:
- Trust or deposit insurance. Under the Condominium Act, the builder must hold your deposit in trust (usually with the builder's lawyer) or secure it with deposit insurance. It can't simply be spent on construction.
- Tarion backup. If, for some reason, your deposit wasn't held in trust, Tarion covers up to $20,000.
If a condo builder terminates your agreement, your deposit must be returned in full, with interest, within 10 days.
What this means for you: Ask the sales office, in writing, who is holding your deposit in trust and whether excess deposit insurance is in place. A reputable builder will answer immediately.
What is the 10-day cooling-off period in Ontario?
The cooling-off (rescission) period lets you cancel a new home purchase for any reason, with no penalty, and get your deposit back.
- Condos (in effect now): Under section 73 of the Condominium Act, buyers of new condos get 10 days. The clock starts on the later of receiving the fully signed APS, the disclosure statement, and Ontario's Condominium Buyers' Guide.
- Freehold homes (starting January 1, 2027): The Homeowner Protection Act, 2024 creates a matching 10-day cooling-off period for new freehold homes. The supporting regulation was filed in August 2026 and takes effect January 1, 2027. Until then, a freehold buyer has no automatic cooling-off period, so negotiate a conditional period or lawyer-review clause before you sign.
Use the 10 days. This is when your pre-construction lawyer should review the APS, especially:
- The deposit schedule
- Caps on development charges
- The HST rebate clause
- Assignment rights
- Occupancy dates
It's also when you confirm your mortgage pre-approval. Many APSs give you 30 days to provide financing confirmation, but if you can't, you're usually past the 10-day window and may lose your deposit.
To cancel, deliver written notice to the builder within the period. A phone call isn't enough.
Can I get my deposit back if I change my mind later?
After the cooling-off period, generally no. Walking away usually means losing your deposit, and the builder may sue for any further losses. Your realistic options:
- Assignment: Sell your contract to another buyer before closing. Many builders allow this for a fee, though some restrict it.
- Mutual release: Some builders will negotiate an exit, especially if they can resell the unit.
- Builder default: If the builder misses deadlines or materially changes the project, you may have termination rights under the Tarion Addendum or the Condominium Act. Talk to a lawyer.
Pre-construction deposit checklist
- ☐ Get the full deposit schedule in writing and put every due date in your calendar
- ☐ Confirm who holds the deposit in trust (condos) or register your APS with Tarion within 45 days (freehold)
- ☐ Book your lawyer review inside the 10-day cooling-off period
- ☐ Get a mortgage pre-approval before you sign, not after
- ☐ Keep receipts for every deposit and upgrade payment
- ☐ Ask whether a reduced or extended deposit structure is available
Related reading: Ontario HST Rebate on New Homes · Pre-Construction Closing Costs in Ontario
Frequently asked questions
How much deposit do I need for a pre-construction condo in Ontario?
Most Ontario pre-construction condos require 15–20% of the purchase price, paid in instalments over one to two years. Launch incentives sometimes reduce this to 5–10%.
Does Tarion protect my condo deposit?
Condo deposits must be held in trust or secured by deposit insurance under the Condominium Act. If a deposit wasn't held in trust, Tarion covers up to $20,000.
How much of my freehold deposit does Tarion cover?
For agreements signed on or after January 1, 2018: up to $60,000 on homes priced $600,000 or less, and up to 10% of the price (maximum $100,000) on more expensive homes. Upgrade payments count toward the limit.
Is there a cooling-off period for new freehold homes in Ontario?
Starting January 1, 2027, buyers of new freehold homes get a 10-day cooling-off period under the Homeowner Protection Act, 2024. Before that date, only condo buyers have a statutory cooling-off period.
When does the 10-day cooling-off period start for a condo?
It starts on the later of the day you receive the fully signed agreement, the disclosure statement, and the Condominium Buyers' Guide.
Can I use my FHSA or RRSP for a pre-construction deposit?
Rules for withdrawing from an FHSA or the Home Buyers' Plan have timing requirements tied to when you acquire the home, which can be years away for pre-construction. Speak to your financial institution before planning on either for deposits.
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. Deposit terms vary by agreement, and protection limits are set by Tarion and Ontario legislation. Have a real estate lawyer review your agreement before your cooling-off period ends. Sources: Tarion; Condominium Act, 1998; O. Reg. 290/26.
Comparing deposit structures between projects?
I'll put two or three builders side by side, with deposits, closing cost caps and HST terms, so you can see the true cost before you commit. There's no cost to you as a buyer.