The Home Buyer’s Deposit in Ontario: How Much, Who Holds It, What If It Fails
Typically 5% in the GTA, delivered in 24 hours, held in trust — plus up to $200K of insurance
How much is the deposit when buying in Ontario, and where does it go?
The deposit is money the buyer pays when submitting an offer (or shortly after acceptance) to show good faith — and it counts toward your down payment at closing. In the GTA, a common amount is about 5% of the purchase price (negotiable; there’s no statutory percentage). It’s usually given to the listing brokerage’s trust account. According to RECO, a brokerage that receives a deposit must deposit it within 5 days into a designated trust account at a recognized financial institution.
Sources: Real Estate Council of Ontario (reco.on.ca, Consumer Deposit Insurance / Protecting Your Deposit); OREA standard clauses (some points are market practice, not statute).
The deposit is the most misunderstood money in a home purchase — it’s not a small “lose-it-and-shrug” sum but often tens of thousands of dollars. How much, to whom, when, and whether you get it back if the deal dies all involve real cash. Here are Ontario’s deposit rules — including a protection many buyers don’t know about: RECO’s consumer deposit insurance.
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How much: typically 5% in the GTA, but negotiable
ℹ️In a bidding war, a larger deposit delivered with the offer often moves a seller more than verbal assurances. But don’t offer a deposit beyond your cash capacity — the more you put up, the larger your exposure if something goes wrong on your side and you default.
When it’s paid: “upon acceptance” vs. “herewith”
Who holds it: the listing brokerage’s trust account
A little-known protection: RECO consumer deposit insurance
⚠️Releasing the deposit on a failed deal requires a mutual written release or a court order — meaning that even if you believe you’re entitled to it back, the money stays stuck if the other side won’t sign. Get a lawyer involved early in any large-deposit dispute.
💡 The deposit is cash that must arrive on time. It ultimately credits your down payment, so it isn’t an “extra” cost — but you must be able to produce it within the offer’s window (often 24 hours). Before you offer, confirm this cash is liquid and available.
If the deal dies, where the deposit goes
Two scenarios. If you exit lawfully because a condition wasn’t met (financing or inspection, say), the OREA standard wording makes the agreement null and void and the deposit should be returned in full. But if a buyer defaults without cause, the seller typically claims the deposit as damages. The crucial reality: according to RECO, in either case actually releasing the deposit from trust normally requires a signed mutual release from both parties — otherwise it takes a court order. So in a dispute the money can sit stuck in the trust account — don’t assume that “being in the right” gets it back instantly.
GTA Market Data (Monthly) →Ontario Home Buying Guide →The Ontario Selling Blueprint →
Frequently Asked Questions
How much is a home deposit in Ontario?
There’s no statutory percentage. GTA market practice is around 5% of the price; in multiple-offer situations buyers sometimes offer more (e.g., 10%) to signal commitment. The amount is negotiated in the offer.
Who holds the deposit, and where?
Usually the listing (seller’s) brokerage, in its trust account. According to RECO, the brokerage must place it within 5 days into a designated trust account at a recognized financial institution.
What if the brokerage holding my deposit goes bankrupt or steals it?
According to RECO, Consumer Deposit Insurance protects you at no cost — up to $200,000 per claim and up to $4 million for all claims from a single event, covering fraud, insolvency or misappropriation.
Can I get the deposit back if the deal falls through?
If you exit lawfully on an unmet condition, OREA wording returns it in full. But actual release usually needs a mutual release or court order, and a seller can claim it as damages if the buyer defaults without cause.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · GUILD Elite
VP & Branch Manager, Bay Street Group Inc.
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