ARTICLE
25 June 2025

Tarion's Updated Deposit Protection Policy

SB
Sorbara Law

Contributor

We offer exceptional legal service to individuals, businesses, institutions, and governmental bodies around the corner and across the world. Our lawyers represent a remarkable depth of experience and deliver a range of legal expertise that is unusual in all but the largest of law firms.

SorbaraLaw provides corporate and commercial services to the smallest of entrepreneurial start-ups and to fast growing technology based firms, multi-generational family businesses, some of Canada’s largest multi-national corporations, and important foreign individual and corporate investors. Our corporate and commercial services include all aspects of business law including tax, incorporation, reorganizations and consolidations, mergers, acquisitions, divestitures, succession, structured finance, real estate matters, specialized services required by banks and financial institutions, and all manner of tax-driven transactions.

If you're planning to buy a new freehold home in Ontario, or are already in the process, you need to be aware of important updates to Tarion's Deposit Protection policy.
Canada Ontario Real Estate and Construction

If you're planning to buy a new freehold home in Ontario, or are already in the process, you need to be aware of important updates to Tarion's Deposit Protection policy.

What is Tarion?

Tarion is a consumer protection organization established by the Government of Ontario to administer the province's new home warranty program. One of its key roles is to protect the deposits of buyers who purchase newly built homes.

How Deposit Protection Works

When you put down a deposit on a new freehold home, Tarion protects that money in cases where the builder goes bankrupt or breaches the purchase agreement.

Here's how the current deposit protection coverage works for freehold homes:

  • For homes priced under $600,000, you're covered for up to $60,000.
  • For homes priced over $600,000, you're covered for 10% of the purchase price, up to a maximum of $100,000.

What's Changing?

Starting July 1, 2025, buyers of new freehold homes will be encouraged to notify Tarion within 45 days of signing a purchase agreement.

Beginning January 2026, only buyers who notify Tarion within this 45-day window will be eligible for the full coverage amount of up to $100,000.

If you miss this deadline, you'll still receive coverage, but it may be significantly reduced.

Why This Matters

This new reporting requirement doesn't change the maximum amount of coverage available, but it helps Tarion confirm early on that your builder is properly licensed and legally allowed to construct and sell homes in Ontario. This early notification helps prevent illegal building activity and gives buyers greater peace of mind.

Where to Submit Your Purchase Agreement

To ensure you're fully protected, submit your purchase agreement through Tarion's online portal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More