HST, Tarion warranty, and no bidding wars vs. established neighbourhoods and faster closing. Full comparison.
Buying a newly built home versus a resale property in Canada involves fundamentally different processes, costs, and risks. Neither is universally better — the right choice depends on your priorities, timeline, and risk tolerance.
| Factor | New Build | Resale |
|---|---|---|
| HST | Yes (usually embedded in price) | No |
| Tarion warranty (ON) | Yes | No |
| Closing timeline | 6 months–3 years (occupancy) | 30–90 days |
| Bidding wars | Usually set pricing | Common in hot markets |
| Customization | High (pre-construction) | Limited (renovate after) |
| Condition certainty | New everything | Inspector-assessed |
| Neighbourhood maturity | Often developing | Established |
| Purchase agreement | Builder's contract (complex) | Standard APS |
New homes in Canada are subject to HST (or GST in non-HST provinces). In Ontario, HST is 13% — a massive cost. However, builders typically embed the HST in the listed price assuming the buyer will occupy the home as a primary residence (qualifying for the HST New Housing Rebate).
If you're buying for investment/rental, you may not qualify for the full rebate and could owe significant additional HST at closing. Always clarify with the builder and your lawyer.
Ontario's Tarion warranty requires builders to provide statutory warranties:
New builds in Canada regularly experience delayed occupancy dates — sometimes by years in the case of high-rise condos. Review the Addendum carefully. Builders can extend occupancy dates with notice, and the compensation for delays is often minimal (typically a few thousand dollars in Ontario under Tarion).
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Open KOHO Free — Code 45ET55JSYAA resale home lets you see exactly what you're buying. You can inspect it, research the neighbourhood, check what schools are nearby, and understand traffic patterns. This certainty is valuable, especially for families with specific school or commute requirements.
Resale homes are not subject to HST (assuming the seller is an individual, not a developer). This is a major financial advantage over new construction. However, you still pay land transfer tax, legal fees, and title insurance — and these closing costs are due in cash at closing, not rolled into the mortgage.
Older homes carry more risk of hidden defects. A thorough home inspection mitigates but doesn't eliminate this risk. Consider asking for a seller disclosure statement (mandatory in some provinces) and reviewing the property's permit history at the local building department.
Related guides: home inspection checklist, Ontario closing costs, condo vs house comparison.