How a deposit structure works
When you buy a new freehold home from plans, you don’t pay the full price until closing. Instead you pay a series of deposits, typically totalling 10% to 20% of the price, over the first several months. A common Ontario freehold structure looks like this:
| When | Typical deposit | On a $799,000 home |
|---|---|---|
| On signing | $20,000–$25,000 | $25,000 |
| 30 days | 2.5%–5% | $19,975 |
| 60 days | 2.5%–5% | $19,975 |
| 90 days | 2.5% | $19,975 |
| 120–180 days | Balance to 10% or more | $0–$40,000 |
| Total before closing | ~10% | ≈$84,925 |
Illustrative only. Every builder sets its own structure, and launch-weekend structures are often lighter than later releases.
The rest of the price is paid on closing, usually with a mortgage. Because Erin homes typically close 18 to 36 months after signing, deposits are effectively your only cash outlay for a long stretch, which is why investors focus on return on deposit. Try it in our investment calculator.
How much of your deposit Tarion protects
Freehold homes in Ontario are covered by Tarion, the province’s new-home warranty program. If a builder goes bankrupt or fundamentally breaches the agreement, Tarion protects your deposit up to:
- $60,000 on homes priced at $600,000 or less, and
- 10% of the price, to a maximum of $100,000, on homes over $600,000.
Since January 1, 2026, buyers should register their purchase with Tarion within 45 days of signing to make sure they receive the full coverage. Late registrants share a capped annual pool. Do it as soon as you sign.
Deposits above the Tarion limit are not protected the same way. Some builders offer deposit insurance or trust arrangements for the excess, so ask before you agree to a heavy structure.
No cooling-off period on freehold homes
Ontario’s 10-day cooling-off period applies to new condominiums only. A new freehold house, semi or townhome is binding once you sign, unless the agreement gives you a conditional period. Many purchasers negotiate a short lawyer-review condition (often three to seven days). Ask for it before you sign, especially on launch weekends.
Budget for closing costs
Beyond deposits and your mortgage down payment, plan for:
- Ontario land transfer tax. Erin has no municipal land transfer tax; first-time buyers get up to $4,000 back.
- Legal fees and title insurance.
- Adjustments in the agreement: Tarion enrolment fee, utility meter and hydro connection charges, water meter, tree planting or grading deposits, and any development-charge increases above a cap. Look for capped adjustments.
- HST rebate assignment and whether the builder credits Ontario’s 2026 relief (see our HST relief guide).
- Property tax at about 1.23% of MPAC assessed value in Erin for 2026.
If closing is delayed
Builders must give you a firm or tentative closing date and follow Tarion’s rules for extensions. If they miss a firm date, you may be entitled to delayed-closing compensation from the builder, backed by Tarion. Read the Statement of Critical Dates that comes with your agreement, and keep every notice the builder sends.
Frequently asked questions
How much deposit do I need for a pre-construction home in Erin?
Most Ontario freehold pre-construction deposits total about 10% to 20% of the purchase price, paid in instalments over the first several months after signing. Exact structures vary by builder and release.
Is my pre-construction deposit protected in Ontario?
For freehold homes, Tarion protects deposits up to $60,000 on homes priced $600,000 or less, and 10% of the price to a maximum of $100,000 on homes over $600,000. Register your purchase with Tarion within 45 days of signing for full coverage.
Is there a cooling-off period when buying a new freehold home in Ontario?
No. The 10-day cooling-off period applies only to new condominiums. For freehold homes, negotiate a lawyer-review condition before signing.
This guide is general information, current to October 5, 2026, and is not legal, tax or financial advice. Programs and rules change; confirm with your lawyer, accountant, lender or the CRA before acting.
