New-Home Deposit Planning Guide
Deposits are the part of a pre-construction purchase that most often catches buyers out. Here is how the structure works and how to plan for it.
In a resale purchase the deposit is a single payment. In pre-construction it is a schedule spread over months, and the total is usually substantially larger. Understanding that structure before a release is the difference between a comfortable purchase and a stressful one.
How a deposit schedule is structured
Pre-construction deposits are typically expressed as a percentage of the purchase price, split into instalments tied to dates from the signing of the agreement. A common freehold pattern is a payment on signing followed by further instalments at intervals such as 30, 90, 180 and 365 days, though structures vary widely between builders and releases.
Deposit structures for any specific community are set by the builder and published with the release package. Do not assume a structure from another project applies.
No deposit structure has been published for UpTown Woodbridge. It will be released with the sales package.
Cheques and payment mechanics
Builders commonly require post-dated cheques for the full deposit schedule at signing. That means the money does not all leave your account at once, but the commitment is made immediately and the dates are fixed.
Confirm which account the cheques are drawn on and that funds will be available on each date. A returned deposit cheque is a default under most agreements.
How deposits are protected
Deposits on new homes in Ontario are protected under the provincial new home warranty programme administered by Tarion. For freehold homes, deposit protection applies up to a statutory maximum; for condominiums, deposits are held in trust under the Condominium Act with separate warranty coverage.
Coverage limits are set by regulation and have changed over time. Confirm the current limits directly with Tarion and with your lawyer at the time you sign, and ask specifically what happens to your deposit if the project does not proceed.
Where the money comes from
Deposit funds usually come from savings, the proceeds of a home sale, registered plan withdrawals, or a gift. Each has timing implications.
If you are using RRSP funds under the Home Buyers' Plan, note that the withdrawal has its own timing rules and the funds must be in the plan for a minimum period beforehand. If you are using a First Home Savings Account, confirm the contribution and withdrawal rules with your institution. If you are relying on the sale of an existing home, be realistic about when those proceeds actually land.
The costs that sit alongside deposits
- Upgrade and décor deposits, usually payable separately and often non-refundable
- Legal fees for the agreement review
- Any extension or amendment fees set out in the agreement
- The closing cash requirement, which is separate from and additional to the deposit
Building your deposit plan
Work backwards. Estimate the purchase price range you are targeting, apply a plausible deposit percentage, and lay the instalments on a calendar. Then check each date against your actual expected cash position, including any income variability.
If a plausible schedule does not work on paper, it will not work in practice. Better to discover that now than during a release window.
Frequently asked questions
How much is the deposit for UpTown Woodbridge?
Specific deposit structures for UpTown Woodbridge have not yet been released, though pricing starts from the $700s. Typically, new home deposits are paid in installments over several months following the signing of the agreement. Registrants will receive the full deposit schedule and payment mechanics as soon as they become available this September.
Are my deposits protected in Ontario?
Yes, new home deposits in Ontario are protected by Tarion up to specific limits defined by the Ontario New Home Warranties Plan Act. Freehold homes currently have deposit protection for up to $100,000 for homes priced over $600,000. This provides peace of mind to buyers during the construction phase of their new community.
How should I prepare my deposit payments?
Buyers should ensure they have liquid funds available for a series of bank drafts or post-dated cheques. Most builders require the first payment upon signing the agreement, with subsequent installments due at 30, 60, and 90-day intervals. Planning your finances early ensures you are ready when the UpTown Woodbridge inventory is released.
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