Since April 1, 2026, anyone who buys a new freehold townhouse in Ontario, including a POTL townhouse on a common elements road, should notify Tarion within 45 days of signing the agreement of purchase and sale to qualify for the maximum deposit protection. Buyers who register late or not at all fall under a separate, limited special fund. A second change follows on January 1, 2027, when new freehold buyers get a 10-day cooling-off period similar to the one condo buyers already have.
Key takeaways
- Register your new freehold townhouse purchase with Tarion within 45 days of signing; do not assume the builder did it.
- On time, deposits are protected up to $60,000 on homes of $600,000 or less, or 10% of the price to a $100,000 cap.
- Late or non-registrants are covered from a special fund that Tarion caps at $15 million a year for all of them combined.
- Condo and stacked townhouses in a condominium corporation follow different deposit rules.
- From January 1, 2027, new freehold buyers can cancel within 10 days of receiving the required documents.
What is Tarion’s 45-day registration rule?
Tarion is the corporation that administers Ontario’s new home warranty and deposit protection. Until this year, a freehold buyer’s deposit was protected simply by signing with a registered builder. Starting April 1, 2026, the buyer should also notify Tarion of the purchase within 45 days of signing.
The notice covers the basics: your name, the builder, the property address and the deposits you have paid or agreed to pay. It is done through Tarion’s online portal, either by you or by your lawyer. A Bennett Jones bulletin on the change specifically warns buyers not to assume the builder has already notified Tarion.
The reason for the rule is practical. When a freehold builder fails, Tarion needs to know who bought, and what they paid, to process deposit claims. Registration gives it that information before a problem arises.
Does the rule apply to every type of townhouse?
No. It turns on whether the townhouse is freehold or part of a condominium corporation.
| Townhouse type | 45-day Tarion notice? | Deposit protection |
|---|---|---|
| Freehold townhouse on a public street | Yes | Up to $60,000, or 10% of price to $100,000 |
| POTL townhouse (freehold lot tied to a common elements condo) | Yes | Same freehold limits |
| Condo townhouse or stacked townhouse in a standard condo | No | Deposits held in trust; Tarion covers up to $20,000 |
POTL townhouses catch people out, because the shared roads and visitor parking are run by a condominium corporation. The house and lot you buy are still freehold, though, and the Bennett Jones summary confirms the rule includes homes on tied land. If you are unsure which category your townhouse falls into, our freehold vs condo townhouse page explains the difference, and the agreement itself will say.
How much deposit protection does a new freehold townhouse get?
For agreements signed on or after January 1, 2018, Tarion’s deposit protection rules set the freehold limit by price. If the home costs $600,000 or less, deposits are protected to $60,000. Above that, the limit is 10% of the purchase price, capped at $100,000.
| Purchase price | Maximum protected deposit |
|---|---|
| $575,000 | $60,000 |
| $850,000 | $85,000 |
| $999,900 | $99,990 |
| $1,150,000 | $100,000 |
Look at how your deposit schedule compares. If a builder asks for 15% or 20% in instalments on a $1,150,000 townhouse, that is $172,500 to $230,000, well over the $100,000 cap. The excess is not covered by Tarion, so ask whether deposits above the cap are held in trust or insured another way.
How to register your purchase in 45 days
- Mark the date you sign. The 45 days run from signing the agreement of purchase and sale, not from the end of any lawyer review period.
- Gather the details. You need the builder’s name, the lot or unit and address, the purchase price and the full deposit schedule.
- Decide who files. Your lawyer can do it as part of the agreement review, or you can file yourself on Tarion’s portal. Agree in writing who is responsible.
- Keep the confirmation. Save the confirmation with your agreement and deposit receipts.
- Update it if deposits change. If you sign an amendment that changes the deposit schedule, ask your lawyer whether Tarion needs to be told.
Tip: Townhouse launches often move fast, with buyers signing on the first weekend and reviewing paperwork later. Put a calendar reminder for day 30, not day 45. If your lawyer is handling the notice, ask for a copy of the confirmation by then.
What happens if you miss the 45-day deadline?
You do not lose deposit protection entirely. Late and non-registrants qualify for coverage under a separate special fund. Tarion describes this as a $15 million fund in any given year, shared among everyone in that group. A law firm bulletin cites $10 million, so treat the pool as limited either way.
If several freehold builders failed in the same year, claims from late registrants could be prorated and paid out later. That is a poor position for anyone with $60,000 or more on deposit.
There is also a timing wrinkle. Tarion’s page says it will defer changes to deposit coverage until January 1, 2027. How that deferral interacts with the April 1 registration date is not fully clear from the published text, so the safe approach is simple: register within 45 days regardless.
The 10-day cooling-off period for new freehold townhouses
Condo buyers have long had 10 days to cancel a new condo purchase under the Condominium Act. Freehold buyers had nothing similar. That changes on January 1, 2027, when changes described by Tarion bring in a 10-day cooling-off period for new freehold homes. The rules come from the Homeowner Protection Act, 2024 and a regulation under the New Home Construction Licensing Act, 2017 (O. Reg. 290/26).
The key detail is when the clock starts. Builders must complete a prescribed information sheet and addendum and include them in the agreement delivered to you. The 10 days only begin once that is done. A buyer cancels by giving written notice within the period, and is entitled to the deposit back.
Should you wait for the cooling-off period?
Not necessarily. A lawyer review condition gives you similar protection today, if the builder agrees to one. Waiting until 2027 also has a cost for some buyers: the Ontario enhanced HST rebate requires an agreement signed by March 31, 2027, as our guide to the $130,000 HST rebate explains. A January agreement would get both the cooling-off period and the rebate, which may suit buyers who are not in a rush.
Warranty coverage after you close
Registration is about your deposit before closing. Once you take possession, the statutory warranty applies whether or not you were late registering. It includes a one-year warranty on workmanship and materials, a two-year warranty on items such as water penetration, electrical, plumbing and heating systems and exterior cladding, and a seven-year warranty on major structural defects. On a townhouse, a major structural defect could involve the foundation or a load-bearing wall, including the walls you share with neighbours. Our pre-construction townhouse page covers closing adjustments and occupancy dates.
Frequently asked questions
Do I need to register a new condo townhouse with Tarion within 45 days?
The 45-day notice rule applies to new freehold homes, including townhouses on parcels of tied land. It does not apply to condominium purchases, where deposits must be held in trust and Tarion provides protection of up to $20,000 if the builder fails to return them. Your lawyer should still confirm the tenure, because some townhouse communities mix freehold and condo blocks.
Can my lawyer register my townhouse purchase with Tarion?
Yes. Tarion’s process allows the buyer or a lawyer to submit the notice through its online portal. Many buyers ask their real estate lawyer to file it during the agreement review. Confirm who is filing in writing and get a copy of the confirmation, because a missed deadline means relying on the limited special fund for late registrants.
What does the new freehold cooling-off period let me do?
From January 1, 2027, a buyer of a new freehold home in Ontario can cancel the purchase by written notice within 10 days and recover the deposit. The 10 days start only after the builder has included the required information sheet and addendum in the agreement delivered to the buyer. Agreements signed before 2027 do not get this right.
Is my deposit safe if the builder goes bankrupt?
Deposits on a new freehold townhouse are protected to $60,000 if the price is $600,000 or less, or 10% of the price up to $100,000, as long as you registered within 45 days. Amounts above those limits are not covered by Tarion. Late registrants share a capped special fund, so their recovery can be lower and slower.
Shopping for a new or nearly new townhouse? Browse GTA townhouses for sale, or read our townhouse buyer’s guide before you sign at a launch.
This article is general information as of October 2026, not legal, tax, mortgage or financial advice. Rules and numbers change, so confirm the details for your situation with a licensed professional.