Guide to Presale Properties: What Seniors Need to Know

What is a presale?
A presale is purchased before construction is completed, allowing buyers to invest in property development early and sometimes customize interior finishes.

How does the deposit structure work?
Deposits typically range from 5-20% of the purchase price and are paid in instalments. These funds are held in trust until the property is completed.

What are the benefits of buying a presale?
Buyers gain access to modern, brand-new homes with potential for value appreciation before completion and flexibility to save while construction is ongoing. 

Full 2-5-10 warranty coverage.

What are the risks of buying a presale?
Changes to the market conditions - the market drops.

Changes to the interest rate conditions, rate ends up being higher than expected.

You’re not buying something that is built yet, so your expectation of what it looks like might be different than the reality once you view it. Also there are unknowns as you may think you have a view, or green space in front of your home, yet only to find out a hydro box or post box or new construction of homes which now blocks your view.

What protections exist for buyers?
Under local laws, buyers benefit from protections like a 7-day rescission period to review contracts, secure deposits, and ensure transparency through mandatory developer disclosures.

How is financing arranged for presale condos?
Buyers pay deposits upfront and typically secure a mortgage closer to the completion date.

What should I review in a presale contract?
Key items include deposit schedules, completion timelines, warranty details, assignment terms, and clauses regarding design changes. Contracts are written by the developers’ lawyers. Having a realtor represent you in the purchase and review your documents with a lawyer is highly recommended.
Assignments are often allowed but depend on the developer’s terms. Review your contract to understand specific assignment conditions and fees.

How do GST and taxes apply?
GST is charged on new properties, including presales. Buyers may qualify for rebates based on the purchase price. Property taxes apply once ownership transfers.

What happens if the project isn't completed?
Deposits are secured in trust, and developers must adhere to regulations that protect buyers’ investments. If a project fails, funds are returned.

Presale condos offer unique opportunities for homeowners and investors alike. If you’re considering a presale property, reach out to discuss the process and how it fits your goals!