THINGS TO CONSIDER WHEN BUYING IN A NEW DEVELOPMENT

Buying in a new development is exciting — but it comes with rules, costs, and risks buyers often overlook.

Understanding these details upfront prevents surprises later.

Here’s what you need to know 👇

1️⃣ Always have your own representation

Developers and their sales teams work for the seller.

You need someone working for YOU.

✔️ hire your own realtor

✔️ review every clause in the contract

✔️ loop in your mortgage broker early

Never sign anything without your own independent advice.

2️⃣ Your interest rate isn’t guaranteed until completion

New builds can take months — sometimes years.

Rates, qualification rules, and lender policies can change while you wait.

✔️ rate holds may expire before completion

✔️ deposit structure can affect financing

✔️ life changes can impact approval

Keep your mortgage broker updated throughout the entire build process.

3️⃣ Understand how GST applies

New construction is subject to GST.

Sometimes it’s included — sometimes it isn’t.

✔️ confirm whether price includes GST

✔️ rebates may apply if it’s your primary residence

✔️ lenders finance based on the final price including GST

Your actual purchase price may be higher than the advertised base price.

4️⃣ Know how allowances, upgrades, and credits affect financing

Upgrades and credits can impact your mortgage approval.

✔️ non-standard upgrades may NOT be financeable

✔️ credits can reduce the mortgageable value

✔️ buyers may need to pay differences in cash

Review all upgrade sheets and credits before firming the deal.

5️⃣ Property tax amounts may not be available yet

Cities often haven’t finalized taxes when developments are still under construction.

✔️ lenders estimate based on purchase price

✔️ estimates can range widely (.5%–1.75%)

✔️ incorrect estimates can affect qualification

Have your broker verify which method your lender uses.

6️⃣ Strata/condo fees start low but rise later

Initial fees are based on projected budgets — not actual costs.

✔️ early fees are often unrealistically low

✔️ fees increase once the building is occupied

✔️ budget adjustments can happen within the first year

Plan your personal budget with increases in mind.

7️⃣ Assignment rules are complicated

Assignments involve unique lender and tax rules.

✔️ not all lenders finance assignments

✔️ GST rules depend on the original price

✔️ an appraisal may be required at the higher assignment price

✔️ buyers may need to pay the price difference in cash

Assignments require careful review by your broker, lawyer, and realtor.

💬 Final Thought

Buying in a new development offers great benefits — but only when you understand the fine print.

Before signing anything, send The Frontline Mortgage Group the paperwork and we’ll review the risks, financing options, and costs so you stay protected. 💬