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For new homebuyers, protecting the deposit that you provided to the builder is an important part of any transaction. In Ontario, deposit protection is administered by Tarion, a not-for-profit organization created by the provincial government.
Effective April 1st, 2026, purchasers of newly constructed homes will have to register their home purchase with Tarion within 45 days of signing their purchase agreement to receive the maximum amount of coverage available.
In this article, we will discuss the importance of deposit protection, outline the new registration requirements and differing coverage amounts, and outline how to register your purchase agreement with Tarion.
Importance of Deposit Protection
Purchasers of pre-construction freehold homes often put down a significant amount of money toward a home that has not yet been built or is not ready for occupancy. Naturally, this carries the risk that a purchaser may potentially be unable to recover their deposit through no fault of their own. Deposit protection is the mechanism that helps protect against this risk.
Tarion’s deposit protection may cover a portion of a purchaser’s deposit if the transaction cannot be completed and the builder refuses to return the funds. Common occurrences where the transaction fails to close, due to no fault of the purchaser, include but are not limited to the following:
- the builder has gone bankrupt,
- the builder has fundamentally breached the purchase agreement,
- the new homebuyer is exercising a statutory right to terminate the agreement, and
- and the builder is unable or unwilling to return the new homebuyer’s deposit.
Tarion’s New Registration Requirement
Starting April 1st, 2026, new homebuyers will have 45 days from signing their purchase agreements to register their agreement with Tarion in order to receive the maximum amount of deposit protection coverage.
The maximum coverage amount available to a purchaser is determined relative to the new home purchase price according to the table below:
| Purchase Price | Maximum Deposit Coverage |
| $600,000 or less | Up to $60,000 |
| Over $600,000 | 10% of the purchase price (max. $100,000) |
New homebuyers who do not register their purchase agreements or do so after the 45-day window will receive coverage through a special $15 million fund. The amount a claimant can receive from the $15 million fund will depend on the total claims made in a calendar year. If the total claims are less than $15 million, individual coverage will be the same as the table above. If the total claims would exceed $15 million, individual coverage will be pro-rated downwards such that total coverage is $15 million.
For example, if 100 unregistered homebuyers claim for $100,000 each, then the total claims are $10 million, and each unregistered homebuyer will receive their full $100,000 claim. But if 200 unregistered homebuyers claim $100,000 each, then the total claims are $20 million, and each unregistered homebuyer will only receive $75,000.
How to Register Your Purchase Agreement with Tarion
To register your Purchase Agreement with Tarion, you will generally need the following three pieces of information:
- Your contact information
- Your deposit amount
- The Home ID number
The Home ID number can be found on the Warranty Information Sheet attached to the purchase agreement. If you cannot find the Home ID number, registration is still possible, but you will need to provide the vendor’s name and the home address or legal description of the property.
With this information at hand, you can visit this link to register your agreement with Tarion. Once completed, Tarion will send a confirmation email to confirm that your new home has been registered.
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.
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