Deposits on an Ottawa new build — how much is protected, and what you now have to do to keep it
A new-build deposit is bigger than a resale one, paid in stages over months, and handed to a builder long before there is a house. What stands behind that money depends on whether you are buying freehold or condominium — and since April 2026, partly on whether you filed one form. How staged deposits are scheduled, what Tarion deposit protection actually covers, and the deposit vs down payment distinction that catches most first-time buyers.
By Ottawa Property Guide EditorialPublished July 31, 2026 Last verified July 31, 2026
On a resale purchase, the deposit is a single cheque that sits in a brokerage trust account for a few weeks. On a new build it is a different animal: larger, paid in instalments across months, and given to a company that will spend the next year or more building something that does not exist yet.
That is not a reason to avoid buying new. It is a reason to know exactly what stands behind the money — because the answer is genuinely different for a freehold home and a condominium, and because one of the rules changed in 2026 in a way that puts a deadline on you rather than on the builder.
First, a deposit is not a down payment
These get used interchangeably and they are not the same thing. The deposit is money you hand over when you sign, to show the agreement is real; it is credited toward the purchase price at closing. The down payment is the total share of the price you are funding yourself rather than borrowing — the figure your lender cares about. Your deposit is part of your down payment, not an addition to it.
The practical consequence on a new build is cash-flow, not arithmetic. The deposit comes out of your account across the construction period, in cheques dated months apart, while the rest of the down payment is not needed until closing. People who plan only for the closing-day number are the ones caught out by cheque three.
The staged schedule, and why it is negotiable-ish
A builder's deposit structure is set out in the agreement of purchase and sale, typically as a series of post-dated instalments — something on signing, then further amounts at fixed intervals, sometimes with one tied to the design studio appointment. Totals well above resale norms are ordinary here.
The amounts are usually fixed by the builder, but the dates are more often movable than buyers assume, particularly before you sign. If the schedule collides with a bonus, an RRSP withdrawal or the sale of your current home, ask. It is a far easier conversation before signing than after a cheque bounces.
Where the money actually sits — the freehold and condo split
This is the part worth understanding before you sign, because the two paths are not variations on a theme.
For a condominium, the Condominium Act requires your deposit to be placed in trust. The money is held apart from the builder's own funds by law.
For a freehold home, there is no equivalent trust requirement. What stands behind your deposit is Ontario's new home warranty, administered by Tarion — which is precisely why the coverage limits below matter more on the freehold side, and why the 2026 rule change applies to freehold buyers and not condo buyers.
What Tarion protects, by home type
Those freehold figures apply to agreements signed on or after 1 January 2018. Two details attached to them are easy to miss and both work in your favour: the price bands are based on the purchase price, so a $700,000 freehold home is protected to $70,000 rather than the flat $60,000 many buyers assume — and since January 2018 deposit protection also covers other payments you have made, including money paid for upgrades and extras. That last point matters after a design studio appointment, when the amount at stake is no longer just the deposit schedule.
The condominium gap nobody mentions at the sales centre
Read the condo line in that box again: $20,000. On a pre-construction condo where the deposit structure runs to 15 or 20 per cent of the price, the deposit will be many times that figure.
This is not a hole in the system — it is the trust requirement doing the work instead. Condo deposits are held in trust under the Condominium Act, and Tarion's $20,000 sits behind that as a backstop for the case where a terminated agreement's deposit is not returned. But it does mean that "who is holding my money, and under what arrangement?" is a fair and specific question to put to a condominium builder, and the answer belongs with your lawyer before you sign rather than in a brochure.
New since 2026 — the 45-day notice, and it is your job
This is the change worth acting on today. Since 1 April 2026, a buyer of a new freehold home must give Tarion notice of the purchase within 45 days of signing the agreement of purchase and sale. Tarion provides a free online tool for it, and the notice records who you are, the property, the deposit paid and the builder.
Give notice inside the 45 days and you qualify for the maximum deposit coverage available. Miss it, and your deposit compensation is instead drawn from a separate fund that is capped annually and shared among everyone who missed it — coverage that could be reduced, rather than the limits in the box above.
Two qualifications, both from Tarion. Tarion is applying a transition period: the change to deposit coverage for late filers does not take effect until 1 January 2027, so the obligation is live now while the consequence begins next January. And the requirement applies to freehold homes only — condominium purchasers are not covered by it, because their deposits are already in trust by statute.
The practical version: file the notice in the same week you sign. It is free, it takes minutes, and it is the only step in this entire process where doing nothing quietly reduces what you are owed.
What to settle before you sign
The full deposit schedule — every amount and every date, in the agreement, not described verbally.
Whether the dates can move to fit your own cash flow. Ask before signing.
Freehold or condominium, and therefore which of the two protection regimes you are actually under.
What happens to your deposit if the project is cancelled or the builder terminates — and that the agreement reflects the 10-day return.
Whether payments for upgrades and extras are being made under the agreement, so they fall within deposit protection.
Your 45-day notice, if you are buying freehold — diarised for the week you sign, not the month you close.
None of this is a substitute for a real-estate lawyer reading the agreement before you sign it, which is the single most valuable few hundred dollars in a new-build purchase. It is what lets you ask them useful questions instead of general ones.
Condominium buyers can move in months before they own the unit, paying a monthly fee that buys them nothing. Freehold buyers get possession and ownership on the same day — but either way the date can move, twice, by a lot. Here is how occupancy actually works and what you are owed when it slips. What happens if the closing date moved, how delayed occupancy is handled, and why occupancy day and closing day are two different days on a condominium.
One appointment, a few hours, and a list of decisions that are difficult to undo. Here's what actually happens at a builder's design studio, what's decided before you get there, and how to stop the room from making the choices for you. What a design appointment actually covers, how finishes and colour selections are recorded, and what is already decided before you walk in.
The model home is a sales tool, not a price list. Here's how builder upgrades are priced, which ones you genuinely cannot add later, and why the appraisal doesn't always agree with what you spent. Which structural options close before the design studio, how a lot premium is separate again, and what upgrades are worth it against what you can do later for less.
Buying preconstruction is a different transaction from buying resale: the builder agreement is the builder's own paper, the home doesn't exist yet, and the timeline is measured in seasons. New vs resale, and the whole journey in the buyer's order.
July 22, 2026
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