Buying Pre-Construction: The Honest Pros and Cons

By Jim Emilson · October 24, 2026

People ask me about buying pre-construction all the time. A new condo or house, bought from the builder's plans, years before it's built.

Full disclosure up front: I lean cautious. There are real advantages, and I'll give them to you straight. But the risks are real too, and the sales centre is not going to walk you through those. So here they are, both sides, the way I'd want them explained to me.

The case for pre-construction

You can build the deposit slowly. Instead of needing your whole deposit saved up front, you pay it in stages over months or even years. For a buyer who doesn't have the full amount yet, that lets you lock in a property now and save as you go.

It's brand new, and you pick the finishes. Nobody has lived in it. You choose the flooring, the cabinets, the counters. For a lot of people, that matters, and fair enough.

Right now in Ontario, the HST can come right off a new home. Two relief programs are running. The big one is temporary: for builder agreements signed between April 1, 2026 and March 31, 2027, eligible buyers — not just first-time buyers — can get the full 13% HST back on a new home up to $1 million. That's up to $130,000. It comes in two pieces: an Ontario enhanced rebate covering the 8% provincial share, and an Ontario affordability payment covering the 5% federal share. The home has to be your primary residence (or a close relative's), and construction has to start by the end of 2028 and finish by the end of 2031. Between $1M and $1.5M the relief stays capped at $130,000, then shrinks as prices rise, and above $1.85M you're back to the older rebate of up to $24,000. Separately, first-time buyers have their own federal-plus-Ontario rebate with the same full relief up to $1M, on a longer clock — agreements signed from March 2025 into 2030, phasing out by $1.5M. Two honesty notes. First, it's a rebate, not an exemption: the tax is charged, then credited by the builder or claimed back, so ask whether the price you were quoted already assumes it. Second, resale homes have no HST at all, so this narrows a gap rather than creating an advantage. But $130K is $130K.

No bidding wars. You buy off a price list at the builder's price. No competing against eight other buyers on a Tuesday night, no waiving conditions under pressure.

You get a builder warranty. New homes in Ontario come with Tarion warranty coverage, including seven years on major structural defects. A resale home comes with no such thing.

Time to get your life in order. Because closing is years away, you have time to sell your current home properly, build your down payment, and plan the move instead of scrambling.

Everything is new and efficient. New building code, better insulation, modern systems. Lower utility bills and very little maintenance spending in the early years.

Condos come with a safety valve. Every new condo purchase in Ontario has a 10-day cooling-off period. You can change your mind for any reason and get your deposit back. Use those 10 days to have a real estate lawyer read the whole agreement — not the brochure, the agreement.

It can work out financially. If prices rise while your home is being built, you may move in with equity. I'll be honest that this cuts both ways — see below.

The case against pre-construction

You don't actually know when you're moving in. They say 2030. It could be 2031, 2032, 2033. Construction delays are normal, and builder contracts are written to allow them. Making life plans around a date you don't control is stressful and sometimes expensive.

The project can be cancelled. If the builder decides the project no longer makes financial sense, they can cancel it. Your deposit comes back, but they may have held it for years — years your money sat there earning you nothing while the rest of the market moved on without you.

Your life will change before the home is ready. This is the one people shrug off, and it's the one I see bite hardest. What you want today is probably not what you'll want in four, five, six years. Jobs change. Families grow or shrink. Relationships start and end. You are making one of the biggest purchases of your life based on a guess about a future you can't see.

You can't see what you're buying. Renderings are marketing. The finished unit can be smaller than the plan suggests, the views can change, and the contract lets the builder substitute "equivalent" finishes. If the construction quality is poor, you find out after you've paid.

Your mortgage is a question mark. You don't get approved today — you get approved near closing, years from now, at whatever rates exist then, based on whatever your income is then. And if the lender's appraisal comes in below your purchase price, you owe the difference in cash. In cash.

The price at closing is not the price on the brochure. Development levies, utility connections, Tarion fees and other closing costs can add tens of thousands, and unless you negotiated caps when you signed, they are uncapped. Ask about them before you sign, because after is too late.

Condos have an occupancy period. With a new condo, you move in and pay monthly occupancy fees — part interest, part taxes, part maintenance estimate — before you actually own the unit. You're paying to live in a home that isn't legally yours yet, and that period can drag on.

You usually pay a premium. New construction commonly costs more per square foot than a comparable resale home you could buy and move into this spring. You're paying extra for "new," and the market doesn't always give it back.

If the market drops, you're still committed. You signed at yesterday's price. If values fall before closing, you close anyway — or lose your deposit and risk being sued for the difference.

Renting it out has tax traps. If you buy new and rent the unit instead of living in it, you can owe the HST upfront and have to sort out the rental rebate rules yourself. More than a few investors have been surprised by a five-figure tax bill.

New condo fees often start artificially low. Builders set the first budget to look attractive. After registration, real costs land, and fees can jump — sometimes alongside special assessments in the early years.

My own history with pre-construction

Pre-construction was a meaningful part of my business from 2012 to around 2017 or 2018. Most of those buyers were investors, and back then the numbers worked.

Then new condo prices per square foot climbed to $1,200, $1,400, while comparable resale condos were selling for $900 to $1,000 a foot. I couldn't make the case anymore. The numbers have to make sense.

Only recently have a few condo projects launched in the GTA where the numbers are starting to become realistic again. The majority? Still don't make sense to me.

During the frothy pandemic era, I pushed many clients away from buying pre-construction. Some of those purchases could have ended in financial ruin. That cost me commission. I sleep at night knowing I did the right thing for my clients.

The bottom line

Pre-construction can make sense for a patient buyer with stable plans, a long time horizon, and the cash reserves to handle surprises at closing. The deposit structure is genuinely helpful, and right now the Ontario HST relief is real money.

But you are lending a builder your deposit for years, betting on a completion date they don't guarantee, a finished product you can't inspect, and a version of your own life you can't predict. Resale lets you see the home, walk the street, know the fees, and move in on a date in ink.

If you're looking at a project, bring me the agreement before the cooling-off period runs out — or better, before you sign. I'll give you the same read I'd give my own family.

That is what Better Properties is here for. Not to sell you a home, but to be your professional real estate advisor team. The job is to tell you the truth about a purchase, even when that truth costs us a commission. If the numbers make sense, we will say so. If they don't, we will say that too.

General information only, not legal, tax, or financial advice. Builder agreements should always be reviewed by a real estate lawyer.