Interim Occupancy Fees Explained (with a Calculator)

An interim occupancy fee is the monthly amount you pay the builder after you get the keys to a new Ontario condo but before the building is registered and the unit is legally yours. By law it can’t be more than three things added together: interest on your unpaid balance, estimated municipal taxes and projected common expense fees. None of it comes off your purchase price, which is why buyers call it “phantom rent”.

Below is how the fee works, how long it usually lasts, a step-by-step calculator and a worked example. Rules and sources are as of October 2026.

What interim occupancy is

With a pre-construction condo, getting the keys and becoming the legal owner are two separate events. In a new building they’re often months apart.

The Condominium Authority of Ontario (CAO) describes interim occupancy as the builder letting you take occupancy before the condominium declaration is registered and title can transfer. You don’t own the unit yet. Ownership transfers only after the condo corporation is registered with the Land Registry Office.

The clock starts when the municipality issues an occupancy permit. Tarion explains that the permit is issued once the unit is “fit for occupancy” under the Ontario Building Code. That does not mean 100% completion. Parts of the building may still be under construction when you move in. Interim occupancy lasts until construction is finished and the condominium is registered.

Why buyers call it phantom rent

• You pay it even if you never move in. The CAO says the buyer must pay the fee during the interim period regardless of whether they move into the unit.
• It isn’t credited to your purchase price. Tarion’s condo buyer guide says to treat these fees as rental payments for the unit.
• You can’t start your mortgage yet. The CAO notes that mortgage payments can’t begin until the condo corporation is registered with the Land Registry Office. So the fee builds no equity.

One thing that does start at interim occupancy is your Tarion warranty. Tarion says the warranty on your unit begins when you take interim occupancy, and you can report issues through MyHome. Inspect the unit carefully the day you get the keys.

How the fee is calculated

According to the CAO, the fee cannot be more than the total of:

1. Interest, calculated monthly, on the unpaid balance of the purchase price at the prescribed interest rate.
2. Estimated monthly municipal taxes for the unit.
3. Projected common expense fees (condo fees) for the unit.

Maximum monthly fee = monthly interest on unpaid balance + monthly tax estimate + monthly common expense estimate

The prescribed interest rate

The rate comes from Ontario Regulation 48/01. Under section 19(1), it’s the Bank of Canada’s most recently reported chartered bank administered rate for a conventional one-year mortgage, taken as of the first of the month in which you take, or are required to take, interim occupancy.

So you won’t know the rate until close to your occupancy date, and it moves with the market. We haven’t quoted a current rate here. Your builder’s occupancy statement should show the rate and the other numbers they used.

Where the other numbers come from

Your Agreement of Purchase and Sale (APS) sets out how the unpaid balance, taxes and common expenses are handled. The unpaid balance is generally the purchase price minus the deposits you’ve paid, but the definition in your APS is the one that counts. Go through that section with your lawyer before occupancy.

Calculator: estimate your own fee

A pen and paper or a spreadsheet is enough. Fill in each step from your APS and the builder’s occupancy notice.

Step	What to work out	Where to find it
1	Purchase price	Your APS (plus any upgrades or adjustments it adds)
2	Deposits paid so far	Deposit receipts and the APS deposit schedule
3	Unpaid balance = Step 1 minus Step 2	Check the definition in your APS
4	Prescribed annual interest rate	Builder’s occupancy statement (set under O. Reg. 48/01)
5	Monthly interest = Step 3 x Step 4 / 12	Your calculation
6	Estimated monthly municipal taxes	Builder’s occupancy statement
7	Projected monthly common expenses	Condo budget in your disclosure documents
8	Estimated monthly fee = Step 5 + Step 6 + Step 7	Your calculation
9	Total cost = Step 8 x expected number of months	Your estimate of time until registration

This gives you an estimate of the maximum. The builder’s statement is the actual figure, and your lawyer can check it against the cap.

Worked example (illustrative numbers only)

These numbers are made up to show the math. They aren’t Tarion or CAO figures, they aren’t a current interest rate, and they don’t come from any real project.

Say you bought a condo for $600,000 and paid $120,000 in deposits (20%) before occupancy. Assume a prescribed rate of 5%, taxes of $250 a month and common expenses of $450 a month.

Item	Calculation	Amount
Unpaid balance	$600,000 minus $120,000	$480,000
Monthly interest	$480,000 x 5% / 12	$2,000
Monthly taxes (estimate)	Assumed	$250
Monthly common expenses (projected)	Assumed	$450
Estimated monthly fee	$2,000 + $250 + $450	$2,700
If interim lasts 6 months	$2,700 x 6	$16,200

That’s about $2,700 a month to the builder, and none of it reduces the purchase price. Over 6 months it adds up to $16,200 on top of your moving and closing costs. Interest is the biggest piece. A larger deposit means a smaller unpaid balance, and that means lower monthly interest.

How long it lasts

Tarion says interim occupancy can run from a few weeks to a year or more. The length usually depends on how far along construction is when you take occupancy. Early movers in a building can expect a longer stretch than people who move in near the end. It ends when construction is finished and the condominium is registered. Then title transfers and your mortgage starts.

If occupancy is delayed

The CAO points to two dates in your APS:

• Firm Occupancy Date: the agreed date your unit will be complete.
• Outside Occupancy Date: the date the builder must set if the Firm date is missed.

If the builder misses the Firm date, you may get Tarion delayed occupancy coverage. If it misses the Outside date, you may be able to terminate within 30 days. Speak with your lawyer before you act on either.

Planning for the fee

• Budget for it as rent. Coming from a rental, you may pay your old rent and the interim fee for a short overlap.
• Get the builder’s numbers early. The occupancy notice should list the rate, tax estimate and common expenses.
• Keep cash for final closing. Interim fees are separate from closing costs, so plan for both.
• Document issues on day one. Your warranty starts at interim occupancy. Report problems through MyHome.
• Skip it if you’d rather. Buildings that are already registered or nearly finished avoid most or all of the interim period. See our move-in ready homes.

If you’re still choosing a project, our pre-construction condos page and city pages for Toronto and Mississauga list current projects. For buildings with nearer move-in years, such as 8 Elm on Yonge or Arcadia District, ask us about expected interim timing before you buy. Call Tall Property at 416-878-0749 for current details.

Frequently asked questions

Does the interim occupancy fee go toward my purchase price?

No. Tarion says the fees aren’t credited to the final purchase price and should be treated like rent.

Do I have to pay it if I don’t move in?

Yes. The CAO says the fee is owed for the whole interim period even if you never move in.

How long will I pay it?

Tarion says anywhere from a few weeks to a year or more. It ends when the condominium is registered.

What interest rate is used?

Under O. Reg. 48/01, it’s the Bank of Canada’s most recently reported chartered bank rate for a conventional one-year mortgage, as of the first of the month you take (or must take) interim occupancy. Your builder’s occupancy statement will show the figure.

This is general information, not legal or tax advice, so speak to a real estate lawyer or accountant about your own agreement before you take occupancy.