Congratulations on your upcoming occupancy!
We understand this is an exciting time and wanted to reach out to ensure you’re fully prepared for this part period of the process.
About Occupancy & Closing your Pre-construction Condo in the GTA
Interim occupancy is a unique concept in Ontario’s condo market, occurring between unit completion and condominium registration, usually lasting one to six months. During this time, your unit may be ready, but the rest of the property could still be under construction.
1. You’ll start paying occupancy fees to the builder based on your occupancy closing date. It’s like rent during this transition.
The fee has three parts, all governed by the Condominium Act:
– Condominium fee: Covers the condo’s utilities cost
– Estimated Realty Taxes: the expected realty taxes for your unit
– Unpaid balance of the original purchase price
For example, if you purchased a unit for $500,000 and made a down payment of 20%, the unpaid balance would be $400,000. There’s also an interest rate involved, typically based on the one-year Bank of Canada mortgage rate, which is currently around 7.5% (subject to change).
Note: You can put more money down on occupancy, which in return will reduce your occupancy fee.
During Occupancy, you will need to provide:
It’s crucial to understand that the occupancy fee is essentially rent to the builder and is not credited to you upon closing. However, once you have tenants in your unit, the rent you receive can help offset the occupancy fee.
The timing of key information can sometimes be tight. Typically, you’ll receive details about the exact amounts you owe, such as the unpaid balance, only about a week before your closing date. This means that things can move quickly, and we’ll need your post-dated cheques and other necessary documentation promptly.
2. Handling HST payments during new construction.After the interim occupancy period, which could typically span six months, the builder will notify you about your upcoming final closing date. This notice typically comes about 30 days in advance. To ensure a smooth transition, it’s vital to start the mortgage approval process soon after your interim closing. This allows you to secure favourable interest rates and have everything prepared well in advance. In our effort to provide ongoing support and value, I’ve arranged a free financing analysis with Kanga Mortgage. You’ll work with their Senior Investment Strategists, Brenda De Carolis & Dion Beg, who have a strong track record in helping Canadians build real estate wealth.
Closing Costs & Adjustments on Final Closing
After final closing, you can apply to the CRA for your HST rebate, which can take up to 120 days. You’ll need to provide a one-year lease agreement with a tenant and provide a few other documents to qualify for the rebate.
For a smooth HST rebate process, consider Mark Purdy at CBS Solutions, who specializes in investor rebates. Having experienced professionals like Mark on your side can save you time and help you get your money back quickly, especially if you’re a first-time investor. Feel free to reach out to us or Mark if you have questions or need assistance with your application.
We’re here to help you maximize your condo investment returns.
Pre-Delivery Inspection
✅ Pre-Delivery Inspection (PDI) happens before occupancy closing.
✅ During PDI, you view your unit, usually finished with minor touch-ups left.
✅ City issues occupancy permit when the unit is deemed fit.
✅ Minor, non-critical issues addressed via Tarion warranty.
✅ We emphasize attending PDI in person.
✅ If unavailable, we offer a proxy service to ensure no detail is overlooked.
Property Management
We provide property management through our in-house team, Marco Toronto.
✅ Tenant’s realtor’s commission is your responsibility (half a month’s rent plus HST).
✅ Expenses for photography will be your responsibility
✅ We advertise on MLS or use our private channels when developer restrictions apply.
✅ You have full control over tenant approval; we present potential tenants for your decision.
✅ Rental income depends on various factors; we offer a Sales and Rental Comparative Market Analysis (CMA) to help determine listing price and rental income.
✅ CMA considers market conditions, unit specifics, balcony access, floor, exposure, and occupancy date.
Get in touch: [email protected]
