Tarion's Updated Deposit Protection Policy

By David Young

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.

Need Help?

Taking a few minutes now could save you thousands down the line. If you have questions about this change, or any part of the home-buying process, our experienced real estate team at SorbaraLAW is here to help.