Cost 1: Development levies — $15-50K

Municipal charges on new construction: education levy, park levy, water/sewer hookups, etc. ‘Capped at $15K’ is a common incentive; uncapped projects can hit $30-50K. Reading whether levies are capped in the contract is critical — many first-timers sign without checking.

Cost 2: Net HST — $15-30K

New homes carry 13% HST. As an owner-occupant, you recover most via federal + provincial rebates, net cost is roughly 2-3% of price ($15-30K depending on price). For investment use (rental), you can’t claim the rebate at closing — pay full HST and apply for the NRRP rebate after 1 year of tenancy. Plan cash flow accordingly.

Cost 3: Occupancy period (condo only) — $2-15K

Condo preconstruction has an occupancy period between developer move-in and final title closing. You live in it without title — paying ‘phantom rent’: mortgage interest + estimated property tax + maintenance fee. Typically 3-12 months, $1-1.5K/month, total $3-15K. This doesn’t reduce principal.

Cost 4: Upgrades — $10-50K

The model suite is ‘upgraded’; the standard package is a different beast. Going from standard to model-suite finish runs $10-50K — hardwood, countertops, cabinets, appliances are all extra. The standard package looks cheap on paper but most owners regret not upgrading once they move in.

Cost 5: Tarion enrollment + closing adjustments — $1-3K

Tarion enrollment fee (paid by developer but typically passed through in contract): $385-1,500. Plus closing-day adjustments — property tax, utility deposits, title insurance, legal fees — totaling $3-5K. Resale has these too, but preconstruction adds $1-2K from the ‘new build’ overhead.

Is the HST rebate automatic?

Owner-occupant: the developer credits it on closing day (you don’t pre-pay). Investor: you pay full HST first, then apply for NRRP rebate after 1 year of tenancy (refund takes 2-3 months).

Does the capped levy have to be in the contract?

Yes, in writing — never verbal. The exact phrasing matters: ‘capped at $15K including HST’ — that ‘including HST’ prevents the developer from layering 13% HST on top of the cap.

Can I skip all upgrades?

You can take full standard, but expect to upgrade post-move-in. Standard packages tend to use entry-level cabinets, basic flooring, laminate counters. Reselling 5 years later, a no-upgrade unit prices 5-8% below comparable upgraded units.

Does occupancy period money reduce my future mortgage?

No. It’s phantom rent paid to the developer — not against principal, not against interest, not against property tax. Plan it as a sunk cost in your budget.

Resale has none of these costs, right?

Resale has its own: land transfer tax, lawyer, inspection, title search. But no development levies, no net HST, no occupancy fee. Overall resale closing is typically 1.5-2.5% of price; preconstruction is 4-7%.