What You Are Actually Paying For in a New GTA Condo
I had Scott Gannon on the podcast. He spends his days helping business owners in Halifax keep the money they have already made, and at one point he asked me whether corporations pay tax. I said yes, of course. Then he asked where they get the money. Revenue. And where does the revenue come from? Customers. So who really pays?
If I wrote a book and I’m selling it for 20 bucks, part of that cost to me is, let’s just call it $2, tax. Well, if I didn’t have to pay corporate tax, then I could charge $18 for the book and still be as profitable.
Scott Gannon, Magnify Wealth
He was talking about corporate tax in general. But it is the single best explanation I know for why a new condo in this city costs what it does, and almost nobody buying one knows it.
How much of a new condo price is government charges?
The most useful published number comes from the Building Industry and Land Development Association. Its 2024 GTA Municipal Benchmarking Study (September 2024) found that fees, taxes and charges from all levels of government account for almost 25 percent of the cost of a new home, and that municipal fees alone now add $122,387 to the cost of a condominium and $164,920 to a single-family home.
On the podcast I said a downtown condo can run closer to a third. That is the kind of estimate you hear from builders, and Tom Storey, who does dozens of condo deals a year, put it at 30 to 40 percent on an earlier episode. The honest answer is that it depends on the building and the municipality. So I am using the published study as the floor: about one dollar in every four.
Development charges are the biggest piece. Those are fees a municipality charges on new construction to pay for roads, sewers, transit and other infrastructure. On top of that sit parkland levies, education development charges, permit and application fees, land transfer tax, and HST. The builder pays most of these before a single unit is delivered.
Who actually pays development charges?
You do. The city sends the invoice to the builder, and the builder puts it in the price. There is nothing sinister about that. A builder that cannot recover its costs does not stay in business, and a builder that is not in business does not build.
That last step is the one that surprised the most people when we talked about it. You are paying tax on tax. The HST on a new home is charged on the full purchase price, and the full purchase price already includes roughly a quarter in government charges.
What changed in 2026: the Ontario HST rebate
This is the part that is genuinely good news, and it has a deadline.
Under the Ontario Enhanced New Housing Rebate (CRA GST/HST Notice 346, August 2026), if you buy a new home from a builder to live in yourself, or for a relation to live in, you can recover the full 8 percent provincial part of the HST, up to $80,000. Ontario separately pays up to $50,000, the equivalent of the 5 percent federal part. It applies to agreements of purchase and sale signed between April 1, 2026 and March 31, 2027, and it is not limited to first-time buyers.
| New home price | Provincial HST rebate (8% part) |
|---|---|
| Up to $1,000,000 | Full rebate, up to $80,000 |
| $1,000,000 to $1,500,000 | Flat $80,000 |
| $1,500,000 to $1,850,000 | Partial rebate, phased out |
| Over $1,850,000 | None (regular Ontario new housing rebate only) |
Eligibility turns on the details: the signing date, primary residence, who is on title, and how the builder’s agreement handles rebates it credits at closing. A lot of new-build agreements assign the rebate to the builder and bake it into the price. Have your real estate lawyer confirm what you actually get before you sign, not after.
Why the cranes left Toronto
A few years ago Toronto had more cranes in the sky than almost any city in North America. Drive around today and try to count them.
The same BILD study found municipal fees on high-rise units rose by an average of $32,000 since 2022, and that GTA approvals take an average of 20 months, which it estimates adds $43,000 to $90,000 to the cost of a new home. Stack that on land and construction costs, and a lot of projects simply cannot be sold for more than they cost to deliver. So they do not launch.
That matters even if you never buy new. Condos that do not launch now are condos that do not exist in five years. Today’s glut of completions will not last forever, and the pipeline behind it is thin.
What this means if you are buying a condo
- A new unit carries its government charges inside the price. A resale unit already paid them years ago, and the next owner does not pay them again.
- The 2026 rebate window is real money. If new construction is on your list and you will live in it, the March 31, 2027 signing deadline is worth knowing now.
- Read who gets the rebate. Whether the builder credits it, keeps it, or you apply for it yourself changes your real price.
- Pre-construction still carries closing risk. Charges can rise between signing and closing, and appraisals do not always keep up.
None of this makes new construction a bad buy or a good one. It just means the sticker price is telling you less than you think, and a quarter of it has nothing to do with the building.
Watch the Full Episode
My full conversation with Scott Gannon, including money, inflation, rent control and what a real tax rate adds up to, is on Supply and Demand.
Frequently Asked Questions
How much of a new condo price in the GTA is government charges?
Who actually pays development charges on a new condo?
Do you pay HST on development charges?
What is the Ontario Enhanced New Housing Rebate?
Why are fewer condos being built in Toronto?
Related Reading
- Closing Costs in Ontario: The Complete Breakdown for GTA Home Buyers
- 30% of New Condos Are Failing to Close: What Pre-Construction Buyers Face in 2026
- Buyers Are Losing Their Deposits: How to Protect Yours
- Toronto Condo Market Analysis
If you are weighing a new build against a resale unit and want the real numbers side by side, send me the two you are looking at. I am happy to walk through it with you, no obligation.