Blog > The Markham Investors Guide to Pre-Construction: Deposits, HST Rebates and Closing Risk
The Markham Investors Guide to Pre-Construction: Deposits, HST Rebates and Closing Risk
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Michael John Lau is a top real estate agent in Markham and a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region. When investors bring him a pre-construction brochure, he starts with the cash needed at each stage and the rent the unit can realistically earn.
What are the real costs for an investor buying a pre construction condo in Markham
Investors pay more at closing than owner-occupiers. Ontario’s 2026 new-home HST relief, including the Enhanced New Housing Rebate of up to $80,000, and the federal First-Time Home Buyers’ GST rebate require the home to be a primary residence, so investors do not qualify. Investors who lease the unit for at least a year can apply for the New Residential Rental Property Rebate, which includes an Ontario portion of up to $24,000. Budget for staged deposits, interim occupancy fees, development charge adjustments and land transfer tax. With Markham one-bedroom rents averaging $2,092 in September 2026, according to Rentals.ca, many new units carry negative cash flow at today’s rates.
The HST Rebates: Who Gets What
| Rebate | Who qualifies | Investors? |
|---|---|---|
| Ontario Enhanced New Housing Rebate, up to $80,000 (agreements April 1, 2026 to March 31, 2027) | Buyers whose home is their own or a relative’s primary residence | No |
| Federal First-Time Home Buyers’ GST rebate, up to $50,000 | First-time buyers living in the home | No |
| New Residential Rental Property Rebate, Ontario portion up to $24,000 | Landlords whose first use of the unit is a tenant’s primary residence for at least one year | Yes |
The federal part of the rental rebate is small for most Markham condos: it phases out between $350,000 and $450,000 of fair market value. The Ontario 2026 Budget also proposed a larger rental rebate for some agreements; as of this writing, confirm its status with your accountant before relying on it.
Why the “HST Included” Price Can Change at Closing
Many builder prices include HST on the assumption that the buyer qualifies for the owner-occupier rebates and assigns them to the builder. An investor who does not qualify usually pays that rebate amount back to the builder on closing, then applies for the rental rebate after the tenant moves in. Purchaser landlords generally have two years from the end of the month the tax became payable to apply. That timing gap can mean tens of thousands of dollars of extra cash on closing day.
Interim Occupancy Fees
For new condos, you may take possession before the building is registered. During that period you pay an occupancy fee instead of a mortgage. Under Ontario’s Condominium Act, it is made up of:
- Interest on the unpaid balance of the price
- Estimated monthly common expenses
- Estimated property taxes
Builders cannot profit from these fees, but none of the money reduces your price. Occupancy can last months, and you may be able to rent the unit during that time, depending on the agreement.
Reviewing a pre-construction offer? Call Michael John Lau, REALTOR®, at (416) 700-0286 to compare it with resale and rents nearby.
Closing Adjustments to Negotiate Early
Ontario does not set a general cap on development charge increases that builders can pass on. A cap has to be negotiated in your agreement. Before signing, ask your lawyer to review:
- Development charge and levy increases, and any cap
- Utility connection, meter and Tarion enrolment fees
- How HST and rebates are treated in the price
- Land transfer tax, about $9,475 on a $650,000 condo
For warranty coverage after closing, see what Tarion covers after year one.
A Cash Flow Example
Consider a $650,000 one-bedroom-plus-den in Markham, financed with 20% down.
| Monthly item | Estimate |
|---|---|
| Mortgage, $520,000 at 5.09% over 25 years | About $3,050 |
| Condo fee (assumed) | $500 |
| Property tax and insurance (assumed) | $350 |
| Total cost | About $3,900 |
| Rent, close to the Markham 1-bed average | $2,100 to $2,500 |
| Monthly shortfall before vacancy and repairs | About $1,400 to $1,800 |
Illustration only. Rent range is based on Rentals.ca’s September 2026 Markham averages of $2,092 for one-bedroom and $2,529 for two-bedroom units. Your numbers will differ.
A negative monthly cash flow may still fit an investor who is planning for long-term value, but it needs to be planned for, not discovered at closing. For stress-testing a rental, see rental cash flow at renewal.
Exit Options and Their Rules
If you plan to sell before closing, an assignment usually needs builder consent and a fee, and HST and the residential flipping rule can apply. See selling within a year of buying. If you plan to hold, focus on the rent, tenant demand nearby and the building’s fees and reserve fund.
Investor Checklist Before Signing
- Map the full deposit schedule against your savings.
- Ask how HST is treated in the price if you will not live there.
- Estimate closing cash, including any rebate repayment.
- Compare the price with resale units in finished buildings nearby.
- Run the rent and carrying costs at a higher rate than today’s.
- Use the 10-day cooling-off period to have a lawyer review the agreement.
Ultimately, the decision is yours. The goal is to make sure you have all the information before you sign.
Next Steps
- Real estate investing in Markham: a plan built around real numbers.
- Condos in Markham: compare resale with pre-construction.
- Mortgage calculator: test your carrying costs.
Frequently Asked Questions
Can investors get the Ontario new home HST rebate?
Not the owner-occupier rebates. They require the home to be a primary residence. Investors may qualify for the New Residential Rental Property Rebate instead.
How much is the rental property HST rebate in Ontario?
The Ontario portion is up to $24,000. The federal portion is up to $6,300 but phases out between $350,000 and $450,000 of value.
What is an interim occupancy fee?
A monthly fee paid before a new condo registers, made up of interest on the unpaid balance, estimated common expenses and estimated property taxes.
Are development charge increases capped in Ontario condo agreements?
There is no general statutory cap. A cap has to be negotiated in your agreement, so ask your lawyer to review it.
What rent can a Markham one-bedroom condo earn?
Rentals.ca reported a Markham one-bedroom average of $2,092 in September 2026. Rents vary by building and size.
When do I apply for the rental rebate?
Purchaser landlords generally have two years from the end of the month the tax became payable. Confirm the details with your accountant.
Work With Michael John Lau in Markham
Michael John Lau helps Markham investors compare pre-construction with resale, using real rents and real closing costs. He works alongside your lawyer and accountant so the numbers are clear before you sign.
📞 Contact Michael John Lau, REALTOR®
🌐 www.callmikelau.com
Considering a pre-construction investment?
Michael John Lau can compare the project with nearby resale and help you map the cash needed at each stage.
Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. Rental rebate rules are from CRA guide RC4231 (September 11, 2026). Owner-occupier rebate details are from CRA Notice 346 (August 24, 2026), TRREB (July 22, 2026) and the CRA First-Time Home Buyers’ GST rebate page (March 30, 2026). The proposed rental rebate is from the Ontario 2026 Budget (March 26, 2026). Rents are from Rentals.ca (September 2026). The example is an illustration only. Michael John Lau is not a lawyer, accountant, tax advisor or mortgage professional. This article is general information, not legal, tax or financial advice. Speak with a qualified professional about your own situation.