{"id":905,"slug":"tarion-deposit-protection-freehold-and-contract-homes","title":"Tarion deposit protection — freehold: $60K (≤$600K homes) or 10% to $100K (>$600K); contract homes: $40K financial-loss coverage","kind":"reference","scope":"business","status":"current","audiences":["kevin","smb-owner","candid-team","client-prospect"],"topics":["gc-vertical","tarion-warranty"],"reference_body":"**Claim (current limits, freehold APS on/after Jan 1, 2018):**\n\n| Sale price | Deposit coverage |\n|---|---|\n| ≤ $600,000 | up to **$60,000** |\n| > $600,000 | **10% of price**, capped at **$100,000** |\n\n**Contract homes** (owner-land, contracted to a licensed builder): **$40,000** Financial Loss Coverage if the builder fails to substantially perform.\n\n**Sources:**\n- Freehold: <https://www.tarion.com/media/how-does-deposit-protection-work-new-homes>\n- Contract homes: <https://www.tarion.com/coverage-before-you-close>\n\n**Confidence:** Verified.\n\n**Trigger:** Deposit protection pays out if the agreement of purchase and sale is terminated through no fault of the buyer (typically builder insolvency or project cancellation). If the agreement is terminated, the deposit must be returned in full within 10 days.\n\n**Upcoming change:** From **April 1, 2026**, freehold buyers must notify Tarion within 45 days of signing the APS to qualify for the **full** deposit coverage limit — see [[tarion-april-2026-freehold-45-day-notice-rule]]. The current limits remain in effect through that transition; the tier change is deferred to Jan 1, 2027.\n\n**Condo deposits** are protected differently (trust-based with Tarion backup) — see [[tarion-deposit-protection-condo-trust-20k-backup]].","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"tarion-april-2026-freehold-45-day-notice-rule","title":"O. Reg. 17/25 freehold deposit change — from April 1, 2026, buyers must notify Tarion within 45 days of signing to qualify for full coverage; tier change deferred to Jan 1, 2027","kind":"reference","scope":"business","link_type":"relates-to"}],"incoming":[{"slug":"research-brief-tarion-ontario-may-2026","title":"Research brief: Tarion Warranty Corporation — definitive reference (May 2026)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"tarion-april-2026-freehold-45-day-notice-rule","title":"O. Reg. 17/25 freehold deposit change — from April 1, 2026, buyers must notify Tarion within 45 days of signing to qualify for full coverage; tier change deferred to Jan 1, 2027","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"tarion-guarantee-fund-2024-100m-payouts","title":"Tarion Guarantee Fund — 2024 payouts >$100M (largest single year in program history); 900+ deposit claims drove the $250 capital-replenishment surcharge","kind":"reference","scope":"business","link_type":"relates-to"}]},"created_at":"2026-05-24T14:19:39.458Z","updated_at":"2026-05-24T14:19:39.458Z"}