Closing Costs On New Construction: Cut Fees & Move In Confidently

Buying your first newly built home in Ontario is exciting. It’s a fresh start with brand-new everything.

Yet many first-time buyers feel uneasy when they hear about closing costs – those extra expenses due at the finish line of your home purchase. At Zinati Kay, we believe clarity is key. We break down exactly what you’ll pay (and why) so you feel confident and prepared, not caught off guard.

What Are Closing Costs, and Why Do They Matter?

Closing costs are the final expenses you pay when your home purchase is completed. They come on top of your down payment and the home’s price. These costs cover things like taxes, legal fees, and adjustments for utilities or prepaid items. Every home purchase – whether new construction or resale – will have closing costs. The difference with a brand-new home is that there are a few unique fees you won’t encounter with a resale home. Understanding these costs upfront means no surprises on closing day.

Why New Construction Has Additional Fees

When buying a newly built home (or condo), you’re not just paying for the property itself. You’re also covering certain one-time costs related to bringing that brand-new home into service. These can add up – often several thousands of dollars (roughly 3-5% of the purchase price, sometimes more for condos). The good news is that with the right guidance, many of these costs can be anticipated, managed, or even reduced through rebates. Zinati Kay’s team has decades of experience with new construction closings, so we know every potential cost and how to handle it seamlessly for you.

New Construction vs. Resale: How Closing Costs Differ

Buying a resale (previously-owned) home comes with standard closing costs like land transfer tax, legal fees, and adjustments for property taxes or utilities. Buying new construction in Ontario, however, means a few extra costs unique to new homes. Here’s how they compare:

HST on the Purchase Price: New homes are subject to Ontario’s 13% HST, whereas resale homes are generally HST-exempt. The price of a new build usually includes HST (especially if you plan to live there as your primary residence). There are government rebates available for new-home HST – and we’ll make sure you claim every dollar you’re eligible for. (Resale home purchases don’t include HST, so this isn’t a factor for them.)
Tarion New Home Warranty Fee: All newly built homes in Ontario come with a Tarion Warranty – a program protecting your home against defects for up to 7 years. This is great peace of mind for buyers. The builder enrolls your home in Tarion, but the enrollment fee (often a few hundred dollars, scaled to your home’s price) is passed on to you at closing. Resale homes don’t carry this fee, because their warranty coverage period has either passed or doesn’t apply.
Development Charges and Levies: To support new roads, parks, and services, municipalities charge developers development fees on new construction projects. Builders often pass some of these costs to the buyer in the purchase agreement. This can amount to a few thousand dollars depending on the area. With a resale home, you won’t face development levies – those costs were handled when the home was first built.
Utility Hookup Fees: Your brand-new home may need initial connection of utilities like water, electricity, gas, and sewer services. The builder will charge utility hookup fees at closing (typically a few hundred dollars for each service) to activate accounts and install meters. In a resale home, utilities are already connected, so you usually just take over the accounts – no extra hookup charges.
Land Transfer Tax: This cost applies to both new and resale purchases – it’s the tax the Ontario government (and the City of Toronto, if applicable) charges on property sales. The key difference for first-time buyers is you get a rebate on land transfer tax (currently up to $4,000 off the Ontario tax, plus an additional rebate if you’re buying in Toronto). We ensure you receive these first-time buyer rebates to save money. Without an experienced team, buyers might overlook this huge saving – but not on our watch.
Other Adjustments: There can be other new-build adjustments, such as reimbursing the builder for any prepaid property taxes or contributing to the initial condo reserve fund (for a newly built condo). While these specifics differ by project, we will review every line item with you so you know exactly what you’re paying for. On resale closings, adjustments typically cover prorated taxes or utility bills between the seller and buyer, rather than any builder-related fees.

As you can see, closing a new construction home involves a few more moving parts. But none of these should scare you – they’re simply part of buying a brand-new home. With Zinati Kay’s guidance, you’ll know what to expect and understand how each cost benefits your investment.

What First-Time Buyers Need to Know (and Do)

Knowledge is power (and savings). As a first-time homebuyer, being aware of new construction closing costs means you can budget properly and take advantage of savings:

Plan for the Costs: We recommend budgeting roughly 5% of your new home’s price for closing costs. You might not use it all, but you’ll feel secure knowing you’re covered. (Resale home closing costs are usually a bit lower, but for new builds it’s wise to have a little extra set aside.)
Take Advantage of Rebates: Ontario wants to help first-time buyers. In addition to the land transfer tax rebate, many new home buyers qualify for an HST New Housing Rebate (which can put thousands back in your pocket). Our team will handle the paperwork and ensure you get these rebates without hassle.
Review Your Purchase Agreement Closely: Your builder’s sale agreement outlines which fees you’re responsible for. We will review it with you early on – ideally before you even firm up the purchase – to identify any excessive charges or opportunities to cap certain fees. Zinati Kay’s experienced real estate lawyers have seen countless builder contracts, so we know what to look for to protect your interests. This proactive step can save you from costly surprises on closing day.
Trust Your Legal Team: There’s no need to wade through legal jargon or complicated calculations on your own. Zinati Kay makes it easy for you. We’ll provide a simple breakdown of all your closing costs well in advance. You’ll know exactly what funds to have ready on closing day, down to the penny. No last-minute shocks, no confusion.

The Zinati Kay Advantage: Experience, Clarity, and Peace of Mind

Choosing the right law firm for your closing can save you money, time, and stress – especially with a new construction home. At Zinati Kay, we help first-time buyers navigate complex new construction closings with ease, avoiding costly surprises. Here’s why smart first-time buyers work with Zinati Kay:

Decades of Experience: We’ve handled thousands of new construction closings across Toronto and Ontario. Our depth of experience means we know the ins and outs of builder agreements, Tarion warranties, and all those little fees. We spot issues before they become problems and ensure nothing falls through the cracks. With Zinati Kay, you get an expert team that has seen it all.
Fixed-Fee Pricing: As a first-time buyer, you have enough new expenses to juggle – the last thing you need is an unpredictable legal bill. Our fixed closing cost pricing (a flat fee for our services) gives you complete cost certainty. You’ll know upfront exactly what your legal fees will be (our fee is $999 + HST, which includes all standard disbursements). No hourly charges, no surprises. It’s transparent and budget-friendly – just what you need when every dollar counts.
Seamless, Worry-Free Closings: Buying a home should be a happy milestone, not a source of stress. Our team coordinates all aspects of the closing behind the scenes – from title searches and document preparation to working with your builder’s lawyer and your bank. We troubleshoot issues early and keep everyone on track so that your closing day is smooth. You simply sign the final papers (we offer convenient remote signing too) and get your keys. Leave the heavy lifting to us.
Personalized Attention: At Zinati Kay, you’re not just another file number. We understand that as a first-time buyer of a new home, you’ll have questions – lots of questions! We take the time to answer them all in plain language. Whether it’s explaining what a “”statement of adjustments”” is or walking you through how to set up your utility accounts, we’re here for you. Our lawyers and staff are friendly, patient, and accessible. We treat your closing with the same care and detail as if it were our own purchase.
No Surprise Fees – Ever: Many new home buyers have heard horror stories of unexpected charges popping up right before closing. With Zinati Kay in your corner, that won’t happen. We diligently review every charge on your closing statement. If something doesn’t look right or wasn’t agreed upon, we catch it and challenge it. Our goal is that when you arrive at the final signing, every dollar makes sense and every cost has been explained. You’ll close with confidence, knowing nothing was overlooked.

Ready for a Smooth Closing on Your New Home?

Closing on a new construction home doesn’t have to be complicated or scary. With the right preparation – and the right team of experts guiding you – you can save money and close with total peace of mind.

Zinati Kay is here to make your first home purchase in Ontario an easy, positive experience. We combine expert knowledge and genuine customer care to give first-time buyers an edge. From explaining closing costs in clear terms to ensuring all the paperwork is handled correctly, we’ve got you covered every step of the way.

Take the guesswork and stress out of your new home closing. Let our experienced real estate lawyers handle the details while you focus on the excitement of moving into your brand-new home.

Ready to get started, or have questions about closing costs on your new construction purchase? Contact Zinati Kay Real Estate Lawyers today for a free consultation. We’re always happy to help first-time buyers navigate the process smoothly. With Zinati Kay by your side, closing on your new home will be as straightforward as turning the key in the lock.