New Build Mortgage

A new build mortgage (also called a progress-draw or construction mortgage) is a loan that releases funds in stages as construction milestones are met and inspections completed, rather than as a single lump sum at closing. Once construction is complete and occupancy is granted by the local government, the construction loan typically converts to a standard mortgage. Verify the specific draw schedule, inspection requirements, and conversion terms with your lender and a BC lawyer or notary before committing.

Yes. Under the federal Excise Tax Act, new or substantially renovated residential housing is subject to GST at 5% (as of 2026-07-27 — verify current) on the purchase price. Pre-owned resale homes are generally exempt from GST. The federal GST New Housing Rebate may be available if the home meets eligibility criteria; verify the current rebate thresholds and conditions with a licensed tax professional or visit www.canada.ca/en/revenue-agency.

Yes. Under the Property Transfer Tax Act, RSBC 1996, c. 378, PTT is payable when you register title, including for new construction. The general rates (as of 2026-07-27 — verify current) are 1% on the first portion of the fair market value, 2% on the portion over a threshold, and higher brackets above; exemptions may apply for first-time and newly built home buyers. Verify the current thresholds, rates, and exemptions with a BC lawyer, notary, or the BC Ministry of Finance before closing.

The Property Transfer Tax Act, RSBC 1996, c. 378, provides an exemption for qualifying newly built homes that meet certain criteria (including value caps and use as principal residence). The exemption thresholds, eligibility rules, and fair market value limits are set by regulation and change over time (as of 2026-07-27 — verify current). Verify whether your new build qualifies and confirm the current fair market value ceiling with a BC lawyer, notary, or the BC Ministry of Finance before registration.

The lender advances funds in stages—typically tied to completion of foundation, framing, lock-up, finishing, and final occupancy—verified by an independent appraiser or inspector. The draw schedule and conditions are set out in the mortgage commitment and construction loan agreement. Before signing, review the draw terms, holdback requirements (if any), and inspection fees with your mortgage broker, lawyer, or notary to ensure you understand the funding timeline.

If your down payment is less than 20% (as of 2026-07-27 — verify current) of the purchase price, federal law and lender policy generally require mortgage default insurance from CMHC, Canada Guaranty, or Sagen. The insurance premium, maximum purchase price insurable, and other criteria are set by the insurer and the federal government; verify current limits and premium rates with your lender, mortgage broker, or the Canada Mortgage and Housing Corporation at www.cmhc-schl.gc.ca.

Conversion typically occurs when the municipality or regional district issues a final occupancy permit (or equivalent certificate of completion) and all lien holdback periods have expired. The lender then advances the final draw, and the loan converts to a standard amortizing mortgage with regular principal-and-interest payments. Confirm the exact conversion trigger, interest-rate lock terms, and any additional conditions in your mortgage commitment with your lender and a BC lawyer or notary.

Depending on the location and use, additional levies may include municipal development cost charges (authorized under the Local Government Act, RSBC 2015, c. 1), school taxes, and the provincial Speculation and Vacancy Tax Act, SBC 2018, c. 46, if the property is in a designated taxable region and not your principal residence. The Home Flipping Tax Act, SBC 2024 (effective January 1, 2025 — verify current), may apply if you sell within a short holding period. Verify applicability of all levies with your lawyer, notary, or municipal and provincial authorities before purchase.

Under the Real Estate Services Act (RESA), SBC 2004, c. 42, and the RESA Rules, deposit funds paid before completion must be held in trust by a licensee (REALTOR® or lawyer/notary acting as agent) and may not be released to the builder until legal completion or as permitted by the contract and Rules. For pre-sale strata condominiums, additional deposit-protection rules under the Strata Property Act, SBC 1998, c. 43, and the Real Estate Development Marketing Act may apply. Verify the deposit-holdback, release conditions, and trust-account protections with your BC lawyer or notary and ensure compliance before signing the purchase agreement.

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, SC 2022, c. 10 (currently extended through January 1, 2027 — verify current), restricts certain non-Canadians from purchasing residential property in Canada, subject to exemptions. Even if an exemption applies, lenders may have additional requirements (larger down payments, Canadian credit history) for non-resident borrowers. Verify your eligibility under federal law, the Property Transfer Tax Act (which imposes an Additional PTT at 20% (as of 2026-07-27 — verify current) for foreign entities in certain cases), and lender underwriting policies with a BC lawyer, notary, licensed mortgage broker, and the Canada Border Services Agency or Immigration, Refugees and Citizenship Canada before proceeding.