Quick answer: In 2026, pre-construction is often the better deal for buyers who can wait. The expanded HST rebate removes up to $130,000 in tax on new homes. Builders are offering incentives in a slower market, and you pay your deposit over time instead of all at once.
Resale is better if you need to move within months, want an established neighbourhood, or want to see exactly what you're buying.
The deciding factors are your timeline, your cash flow and closing costs.
"Should I buy new or resale?" is the most common question we get from Ontario buyers. In past years, the honest answer was that resale usually cost less upfront. In 2026 the numbers have shifted. Here's a side-by-side comparison so you can decide with real figures instead of gut feel.
The 2026 market in one paragraph
The GTA is in a buyer's market. According to TRREB's September 2026 Market Watch, the average GTA home price was about $1.01 million, down 5% from a year earlier. Sales were down almost 10%, and inventory sat at about 4.6 months, with homes taking an average of 34 days to sell. On the new construction side, builders are competing for buyers with lower deposits, capped closing costs and upgrade packages. Since June 29, 2026, the enhanced HST rebate has been in effect for agreements signed between April 1, 2026 and March 31, 2027.
Pre-construction vs resale: side-by-side
| Pre-construction | Resale | |
|---|---|---|
| Move-in timing | 1.5–5 years | 30–90 days |
| Upfront cash | Deposits spread over 1–2 years | Full down payment at closing |
| Sales tax | HST applies, but 2026 rebates remove up to $130,000 | None |
| Extra closing costs | Development charges, Tarion fee, utility hookups | Home inspection, possible repairs |
| Condition | Brand new, built to current code | Varies, so inspect carefully |
| Warranty | Tarion 1-, 2- and 7-year warranty | None, sold as-is |
| Cancel after signing? | 10-day cooling-off (condos now, freehold from Jan 1, 2027) | No cooling-off period |
| Negotiating power in 2026 | Deposits, caps, upgrades, sometimes price | Price and conditions |
| Main risks | Delays, appraisal gap, rate changes before closing | Hidden defects, bidding wars in hot pockets |
Which is cheaper in 2026? A worked example
Illustrative only. A first-time buyer comparing two $900,000 townhomes outside Toronto.
| Cost | New townhome | Resale townhome |
|---|---|---|
| Purchase price | $900,000 (HST included, net of rebates) | $900,000 |
| HST you pay | $0 if you qualify for the 2026 rebate | $0 |
| Land transfer tax (after first-time rebate) | ~$10,475 | ~$10,475 |
| Development charges / levies | Capped, e.g. ~$10,000 | None |
| Tarion + utility connections | ~$3,000 | None |
| Home inspection | None (PDI is free) | ~$500 |
| Repairs and updates in years 1–5 | Low (under warranty) | Varies, often $10,000+ |
| When cash is due | Spread over 1–3 years | Mostly at closing |
At the same price, new and resale end up close on total cost. New construction adds closing levies, and resale adds repairs and updates. The difference is timing and risk. The new home spreads your cash out and comes with a warranty. The resale home gets you in sooner.
The HST rebate matters most when the new home would otherwise have cost more. Before 2026, the same new townhome might have been priced tens of thousands higher because of HST. Read the full breakdown in our Ontario HST rebate guide.
When pre-construction makes more sense
- You're renting and can wait 2–4 years, and want to save while the home is built
- You qualify for the 2026 HST rebate and can sign before March 31, 2027
- You want low maintenance, energy efficiency and a warranty
- You're investing for the long term and can hold through closing
- You want to choose your layout and finishes
When resale makes more sense
- You need to move within a year because of a job, a growing family or a lease ending
- You want a mature neighbourhood with established schools, trees and transit
- Your income may change before a future closing date
- You want to see the finished product, including the exact view, lot and street
- You want to negotiate hard on price in a buyer's market with motivated sellers
The pre-construction risks to plan for
- Appraisal gap: if the home appraises below your price at closing, you cover the difference in cash.
- Interest rates: you qualify for your mortgage at closing, not today.
- Delays: the builder can extend occupancy within limits. Tarion compensation applies if the builder misses its dates.
- Closing costs: uncapped levies are the biggest surprise, so negotiate caps before you sign. See our closing costs checklist.
Ready to compare specific projects? Start with our step-by-step guide to buying pre-construction, or browse the Buyprecon.ca map.
Frequently asked questions
Is it cheaper to buy pre-construction or resale in Ontario?
At the same price, total costs are often similar. New homes add development charges and Tarion fees, and resale homes add repairs and updates. In 2026, the expanded HST rebate, builder incentives and spread-out deposits make pre-construction more competitive than in past years.
Do you pay HST on a resale home in Ontario?
No. HST applies to newly built homes. In 2026, eligible new home buyers can get up to $130,000 of it back, which narrows or removes the gap.
Is pre-construction a good idea in a buyer's market?
It can be. Builders compete harder for buyers, so lower deposits, capped closing costs and free upgrades are easier to negotiate. The trade-off is waiting for your home and qualifying for your mortgage at closing.
What is the biggest risk of buying pre-construction?
For most buyers, it's the appraisal gap. If prices fall and the home appraises below your purchase price at closing, you have to cover the difference in cash.
Do new homes come with a warranty?
Yes. Every new home in Ontario is covered by the Tarion warranty: one year for workmanship, two years for systems like plumbing and electrical, and seven years for major structural defects.
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, tax or financial advice. Figures are illustrative and depend on your property, municipality and agreement. Sources: TRREB Market Watch (September 2026); Government of Ontario; Tarion.
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