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One of the first decisions Canadian first-time buyers face is whether to buy a brand-new home or an existing resale property. Each has distinct advantages, costs, and risks. This guide helps you decide which is right for your situation.
Quick Comparison
Factor
New Construction
Resale
Move-in timeline
Months to years (if pre-construction)
30–90 days typical
HST/GST
Yes — included or added to price
No HST on purchase price
HST New Home Rebate
Partial rebate available
N/A
BC PTT exemption
Full exemption under $835K for FTBs
Only under $500K for FTBs
Home warranty
Yes (Tarion in ON; HPO in BC)
No statutory warranty
Condition of property
Brand new, customizable
Existing — varies by age/care
Price certainty
Fixed at signing (but extras add up)
What you see is what you pay
Development charges risk
Yes — can be passed to buyer
No
Neighbourhood maturity
New/developing
Established
Inspection needed
PDI (pre-delivery inspection)
Full home inspection
New Construction: Pros and Cons
Pros
Cons
Brand new — no deferred maintenance
Customizable finishes (if early in process)
Full statutory warranty (Tarion/HPO)
Better BC PTT FTB exemption threshold ($835K vs $500K)
Energy-efficient construction
Lower maintenance costs for years
HST/GST applies (added to pre-construction price)
Closing dates often delayed
Development charges can increase price
Builder extras (upgrades) inflate cost
Occupancy fees before final closing
Neighbourhood not yet developed
Pre-construction: may be years until completion
HST on New Homes in Canada
New construction homes are subject to HST (or GST in provinces without HST). This is a major cost difference from resale. In Ontario, HST is 13%. However, the federal New Housing Rebate partially offsets this:
Federal GST/HST rebate: 36% of federal portion (5% GST) on homes up to $350,000; phases out to $450,000
Ontario provincial rebate: 75% of provincial portion (8%) up to $16,080 on homes up to $400,000
Builders often include HST in the advertised price (HST included) or add it on top (HST extra) — always clarify
On a $700,000 new condo in Ontario: HST would be $91,000 — but the rebate (if applicable) and whether it's included in the price varies significantly by builder. Always have a real estate lawyer review a new construction Agreement of Purchase and Sale.
Tarion Warranty (Ontario New Construction)
All new homes in Ontario are covered by Tarion warranty:
1-year warranty: Defects in workmanship and materials
2-year warranty: Water penetration, heating/electrical/plumbing, exterior cladding
7-year warranty: Major structural defects
BC has equivalent protection through the Homeowner Protection Office (HPO). This warranty protection is a major advantage of new construction over resale.
New Construction Closing Risks
Pre-construction buyers face unique risks at closing that resale buyers don't:
Delayed closing: Builders can delay closing — sometimes by years. Ontario's Tarion allows builders 3 firm closing delays before buyers can exit.
Occupancy period: In Ontario condos, there's often an interim occupancy period where you move in but don't own yet — you pay "occupancy fees" to the builder.
Development levies: Some purchase agreements allow builders to pass municipal development charges to buyers at closing. These can add $100–$50,000+ to your costs.
Price adjustments: Some agreements allow price adjustments for changes in HST or development charges.
Resale: Pros and Cons
Pros
Cons
No HST on purchase price
What you see is what you pay (mostly)
Established neighbourhood, mature trees
Faster possession (30–90 days)
Can inspect thoroughly before buying
Negotiate based on condition
May need repairs/renovations
No statutory warranty
Older systems (roof, HVAC, wiring)
Less energy efficient typically
Lower BC PTT FTB exemption ($500K vs $835K)
Which Is Better for First-Time Buyers?
For most first-time buyers in Canada's major cities, the decision comes down to budget and timeline:
Buy resale if: You want to move in soon, you want certainty on closing costs, you can handle some maintenance, and you're buying in a market where $500K gets you reasonable resale options.
Buy new construction if: You're in BC and want the $835K PTT exemption threshold, you want warranty protection, you can wait 1–3 years for occupancy, and you've carefully reviewed the purchase agreement with a lawyer.
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