Pre-construction condos come with many benefits. But, before jumping into a new build, it’s important to consider all of the aspects of this type of purchase. While buying a brand-new condo is a dream for some, the details of the transaction can be overwhelming. With the help of a realtor, you can evaluate this option and consider whether it is right for you.

Michelle Kam, a Toronto real estate broker, knows first-hand that pre-construction condos are not ideal for everyone, but that they do offer a lot of benefits that you can’t get with condos that are already constructed. As an experienced broker, she has dealt with many pre-construction condos all over Toronto. She shares her insight into what buyers should know before jumping in feet first.

Down Payment

In the case of an existing condo, homebuyers may be able to put down as little as 5% as a down payment. Pre-construction condos; however, require a much higher down payment. In fact, on average, buyers will need to put down anywhere from 15% to 20%. Michelle Kam notes that this won’t be required all at once, but that it is something to keep in mind when considering the overall cost of your new property.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto

Mortgage Rates

Although it may be years until your condo is complete, with a pre-construction condo and a preferred mortgage provider who has a history working with the developers, you may be able to lock in a special interest rate for your mortgage. This is especially helpful when rates are low, though it is important to check that the special interest rate can be extended if your condo’s completion date is extended. It is often best to consult with an experienced Toronto real estate broker like Michelle Kam for insight into the best time to buy.

Maintenance Fees

As with any condo, you will be required to pay monthly maintenance fees. However, with a new condo, these fees will likely start small and be increased over time, as management discovers the true cost of maintaining the building. It is important to keep these increases in costs in mind when planning or budgeting.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto

Occupancy Fees

There may come a time when you first move into your new unit when the property is not yet considered yours, although you are living in it. This is known as interim occupancy. During this time, you will be required to pay an occupancy fee until the building has officially been registered, the developer has completed construction, everyone has moved in and the property is put in your name. When everything is complete, there will be a final closing in which the title is registered under your name and the condo officially becomes yours.

Additional Costs

With pre-construction properties, there may be many additional costs that you are not expecting. In addition to your deposit, you may incur development fees, lawyers’ fees and various taxes that do not apply to existing homes and condos. Michelle Kam recommends discussing these additional fees with your realtor so that you can prepare for the full price you will be paying.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto


Many modern condos offer a wide range of amenities available to owners. These amenities may range from pools and hot tubs to gyms, and even spa amenities. When purchasing a pre-construction condo, you can often find a development that offers some or all of the above. These amenities can be attractive selling features, enhancing your quality of life. Inquire with your Toronto real estate agent about which new developments in your area include the amenities you most desire.

Maintenance Free Living

Your condo will be brand new, meaning it should require little to no maintenance. This is very appealing to many people. Just be sure you are aware of the warranty that comes with your pre-construction condo in case something does arise. In Ontario, new homes and condos are covered by the Ontario New Home Warranties Plan Act and Regulations. Therefore, in most cases, if something goes wrong it will be covered under this warranty. As Michelle Kam notes, nearly all pre-construction properties in the province are covered by warranty for up to seven years. It is important to verify this however, as some items such as the Tarion warranty from the province only last 2 years.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto


One of the most appealing aspects of pre-construction condos is the ability to customize them. You can work with the developer and your real estate agent to determine which customizations you would like to make. Typically the builder will provide 3 standard finishing packages along with options for upgrades which can further customize your home. With the help of an experienced Toronto real estate agent, you can focus on upgrades that will improve the resale value of your condo, says Michelle Kam.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto


You may be able to assign your purchase to another party, depending on the assignment rights outlined in your purchase agreement. It is important to familiarize yourself with this assignment clause, as some developers may charge a fee or only allow you to assign the property to certain people, like family members, or within a particular time frame, or when a certain amount of units have been sold within the development. This assignment clause will allow you to assign your contract to a new buyer before you take possession. This is helpful if you change your mind or if you would like to flip the property immediately.

Final Thoughts from Michelle Kam

There are many things to consider when deciding whether to buy a pre or post-construction condo. The benefits of a brand-new condo; however, are hard, if not impossible to ignore, notes Michelle Kam. While you are required to put more down at the onset, the pros significantly outweigh the cons.

Michelle Kam's Guide to Buying Pre-Construction Condos in Toronto

In order to assure a smooth and successful purchase, it is essential that you work with an experienced real estate agent, as well as a Toronto mortgage broker. Professionals in these fields will be able to help you throughout the buying process, answering your questions and ensuring you get the best possible price for your new property. A Toronto real estate agent can also point you in the right direction when it comes to location, reliable developers, and which customizations will most benefit your pre-construction condo.