New developments often look financially appealing at first glance, especially with tax abatements or incentives. Buyers, however, should expect additional costs and delays that are not always obvious at contract signing.
Delays and Limited Utility
Pre-construction and early-phase sales frequently involve long timelines. Buyers may wait months or years between signing a contract and receiving keys. During this period:
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Deposits are tied up and earn no return.
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Mortgage rate environments may change.
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Move-in planning can become uncertain.
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Investors generate no rental income until closings begin
Developer-Related Fees
New development closings typically include costs that do not apply to resales, including:
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Transfer taxes
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Filing fees
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Higher legal fees due to complex contracts
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Initial working capital contributions to the condo board
These add to the buyer’s upfront cash outlay.
Tax Abatements That Expire
Many new buildings offer temporary tax relief. When the abatement ends:
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Annual taxes can rise sharply.
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Monthly carrying costs may exceed comparable resale units.
Resale value can be impacted if taxes jump faster than market norms.
Understanding the full financial trajectory, not just year one, is essential.
Before choosing a new development, I can help you map out the full cost timeline so you know exactly what to expect from contract to long-term ownership.
