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Posted on February 21st 2006 in Legal Articles

Protection for new home buyers

Protection for new home buyers

If you are buying a newly built home, you are protected by the Ontario New Home Warranty Program. This program offers the new home buyer a number of specific protections and warranties.


1. Your down payment – up to a maximum of $20,000.

2. Delays in closing and occupancy – the builder must give you notice of such delays, otherwise you are compensated up to $100 a day for living expenses, to a maximum of $5,000.

3. Substitutions of key elements without your consent, including items such as floor finishes, colours and fixtures, are covered.


1. One year warranty against defects in work, materials and Ontario building code violations.

2. Two year warranty against water seepage through basement walls, water penetration through caulking, windows and doors, defects in the electrical, plumbing and heating systems and Ontario Building Code health and safety provisions.

3. Seven year warranty against major structural defects, up to a maximum of $100,000.


1. Defects in items supplied or installed by the home buyer, such as cabinets, floor coverings and paint.

2. Damage to your personal property that is a result of water seepage and structural defects.

3. Normal shrinkage of materials that dry out after construction.

4. Damage resulting from the home buyer’s negligence.

On closing, the purchaser completes a certificate of completion and possession, which records the date of possession as well as any requested repairs. The vendor will then provide the purchaser with a Warranty Certificate.

For additional information about the Ontario New Home Warranty Program you can check out their web site at www.newhome.on.ca or call the regional office at 1-905-455-0500. If you want information about a new condominium contact ONHWP’s condo office at 1-888-803-9913. 1

The Resource Centre

Land Transfer Tax*
$ 0 _ $ 55,000 _ .5%
$ 55,001 _ $250,000 _ 1%
$250,001 _ $400,000 _ 1.5%

For example, if you are buying a house for $187,500 you will pay $1,600 in land transfer tax.
($55,000 x .005) + ($132,500 x .01) = $1,600

*Land transfer tax is a tax paid by the purchaser, usually at the time the deed to the property is registered. The amount of tax is based on the purchase price of the house.