Torn between a sleek new build and a solid resale near Rouge Woods? You’re not alone. The right choice often comes down to how the financing works, when cash is due, and which taxes apply. In this guide, you’ll learn the key money differences, timing risks, and local Richmond Hill notes so you can move forward with confidence. Let’s dive in.
Pre-con vs resale at a glance
- Pre-construction: larger staged deposits, a longer timeline, possible interim occupancy fees, and final mortgage approval at closing.
- Resale: smaller upfront deposit, down payment at closing, faster financing timeline, and no HST on the purchase price.
- New builds: warranty and deposit protections exist, but you must plan for HST and developer adjustments.
- Assignments: profits are generally taxable for GST/HST, which can surprise sellers and buyers if not planned.
Cashflow and deposit planning
Pre-construction deposits
Pre-construction buyers usually face staged deposits that can total about 15 to 25 percent over months or years. Schedules often start with a reservation fee and follow with several 5 percent installments. Plan your liquidity early and confirm the exact schedule in your Agreement of Purchase and Sale. A helpful overview of typical Ontario pre-con steps and deposits can be found in this pre-construction home buying guide.
Ontario provides warranty and deposit protections for most new homes. Review the province’s guidance on what to know before buying a new home and confirm your builder’s Tarion enrollment and deposit protection limits.
Resale deposits and down payment
With resale, you typically place a small good-faith deposit when your offer is accepted, then bring your down payment funds at closing. If you put less than 20 percent down, mortgage default insurance may be required. For a quick refresher on how deposits differ from down payments, see this deposit vs. down payment explainer.
Approval timing and rate risk
Why pre-con requires re-approval
Pre-approvals usually last 30 to 90 days. If your pre-con home closes years later, your lender will re-underwrite at final closing and rates may be different. That means you should expect re-qualification risk and plan for potential changes. Learn more about how long mortgage pre-approvals last.
The stress test still applies
Whether you buy pre-con or resale, federally regulated lenders use a minimum qualifying rate, often the greater of a set floor and your contract rate plus 2 percent. That can affect how much you qualify for. Review the background on Canada’s mortgage stress test framework and check the current threshold before you shop.
2024–2025 policy updates
Recent federal changes broadened insured-mortgage access, including expanded price caps and extended 30-year amortizations for certain first-time and new-build buyers. These measures can reduce monthly payments for eligible buyers. See the Government of Canada’s summary of homeownership support measures and confirm details with your lender.
Taxes, rebates, and assignments
Resale tax basics
There is no HST on the purchase price of a previously occupied home in Ontario. You will still budget for closing costs like legal fees and land transfer tax. Richmond Hill buyers do not pay Toronto’s separate municipal land transfer tax. See the province’s guidance on Ontario land transfer tax.
New builds and HST
New or substantially renovated homes are generally subject to HST. Some buyers may qualify for new-housing rebates depending on occupancy, use, and other criteria. Review the CRA’s GST/HST information for the home construction industry and speak with your lawyer about your specific agreement.
Assignment sales in Ontario
If you sell your pre-con contract before closing, the profit portion of an assignment is generally subject to GST/HST for agreements entered into after May 7, 2022. Proper documentation is critical because rules differ for deposit reimbursements. Get legal and tax advice early and consult the CRA’s assignment sale rules.
Pre-con specific costs to budget
Interim occupancy fees
For condos, you may receive keys before the building is registered. During this period, you pay interim occupancy fees that cover interest on the unpaid balance, estimated taxes, and maintenance. These payments do not reduce your principal. Learn how interim occupancy works in Ontario from this legal overview.
Builder closing adjustments
At final closing, new-build buyers can face adjustments such as development charges, utility hookups, and warranty enrollment fees. Ask your lawyer for an estimated statement of adjustments well before closing and confirm any fee caps in your agreement.
Local notes for Rouge Woods buyers
Rouge Woods is a mature Richmond Hill pocket with parks, community programming at the Rouge Woods Community Centre, and nearby retail along Bayview and Elgin Mills. You will find established detached homes and pockets of newer townhomes in surrounding corridors. For a neighbourhood snapshot, see this Rouge Woods overview.
On closing costs, remember that Richmond Hill purchases are subject to Ontario’s land transfer tax. First-time buyers may be eligible for a provincial rebate of up to $4,000, and there is no municipal land transfer tax in Richmond Hill. Review details for Ontario land transfer tax.
Quick decision checklist
Choose pre-con if you want
- A brand-new home with builder warranties and modern layouts.
- Time to save while deposits are staged over the build timeline.
- The option to customize finishes within the builder’s program.
Plan for: staged deposits, interim occupancy (for condos), HST and rebate paperwork, re-approval at closing, and developer adjustments. Confirm Tarion enrollment and deposit protections using Ontario’s new-home buyer guidance.
Choose resale if you want
- A shorter closing timeline and more financing certainty.
- Immediate occupancy in an established streetscape.
- No HST on the purchase price.
Plan for: a competitive offer deposit, down payment at closing, land transfer tax, legal fees, and any inspections or renovations after possession.
Steps that help either way
- Get a current pre-approval and ask how long it is valid.
- Stress-test your budget for rate changes, especially for longer pre-con timelines.
- Ask your lawyer to review your agreement before conditions are firm or the cooling-off period ends.
- Map all closing costs early so there are no surprises.
For sellers and assignors
- Considering an assignment? Understand that assignment profits are generally subject to GST/HST and can affect rebate eligibility for the buyer. Review the CRA’s assignment guidance and get tax and legal advice.
- Selling a resale home while holding a mortgage? Ask your lender about penalties and portability before you list so you can plan net proceeds and timelines.
When you’re ready to compare specific properties and numbers side by side, our team is here to help you model scenarios, coordinate legal and lender touchpoints, and manage all the moving parts from offer to keys.
Looking for a calm, expert path to your next move near Rouge Woods? Connect with Kevin Lin Realty for data-driven guidance and concierge-level service across Richmond Hill and York Region.
FAQs
Do mortgage pre-approvals guarantee financing for pre-construction?
- No. Pre-approvals typically expire within 30 to 90 days, and lenders re-underwrite at final closing on pre-con deals. Expect potential changes in rates and qualification. See how pre-approvals work and expire.
Are deposits for new builds in Ontario protected?
- Ontario provides warranty and deposit protections for most new homes, but limits vary by home type and agreement date. Confirm Tarion enrollment and how your deposit is held using the province’s new-home buyer guidance.
Are assignment profits on a pre-con home taxable?
- Generally yes. For agreements entered into after May 7, 2022, the profit portion of an assignment is typically subject to GST/HST, with specific documentation rules for deposit reimbursement. Review the CRA’s assignment sale rules.
Do Richmond Hill buyers pay municipal land transfer tax?
- No. Richmond Hill buyers pay Ontario’s land transfer tax and may qualify for a provincial first-time buyer rebate, but there is no separate municipal LTT like in Toronto. See Ontario land transfer tax details.
What are interim occupancy fees for condos?
- When a condo is ready for move-in before the building is registered, buyers pay interim occupancy fees that cover interest on the unpaid balance, estimated taxes, and maintenance. These payments do not reduce your principal. Learn more about interim occupancy fees.
