On a new-build purchase in Alberta, the cash you need on possession day is your remaining down payment plus a closing-cost layer that resale buyers never see in the same form: legal fees, GST on the new home, utility hookup charges, landscaping deposits or obligations, and development levies written into the builder contract. Lenders test whether you actually have these funds — the standard planning rule remains roughly 1.5% of the purchase price for closing costs on top of the down payment, and new builds are exactly where that buffer gets used. Budget the full number at contract signing, not in the month before possession.
The line items, one by one
Legal fees and disbursements cover your lawyer’s work, Land Titles registration and the statement of adjustments. GST is the big one unique to new homes: it applies to the purchase price (your contract states whether the quoted price is net of GST or plus GST — the two readings differ by thousands of dollars, so know which you signed; my GST guide linked from my builder deposit explainer walks through the mortgage effect). Utility hookups, appraisal fees, and any builder-charged items — fencing, deck or landscaping deposits, Homeowners Association or community fees in newer neighbourhoods — complete the list. Alberta has no provincial land transfer tax, which is the one closing-cost mercy Edmonton buyers get that Toronto buyers do not.
How your lender looks at funds to close
Underwriting adds it up: purchase price, plus GST where payable, plus estimated closing costs, minus deposits already paid, minus the approved mortgage. The remainder must be sitting in your accounts, sourced and seasoned, when the file is reviewed — and reviewed again before funding on long builds. A shortfall discovered at the final review is not a small problem; it can delay funding past the builder’s possession date, which triggers its own contractual consequences. This is one of the quiet ways approvals fall apart late, the pattern in my guide to what can make a mortgage approval fall apart.
“The team at NextDoor Mortgages (Mei & Travis) are the absolute best… provided the help I needed in securing my mortgage.” — Yomi Odusanya, Google review
Build the closing fund on day one
Open the contract, list every charge the builder can pass through, add legal and GST, then hold that total untouched in a separate account while the home is built. If the estimate is wrong, be wrong on the high side — surplus closing funds become your first lump-sum prepayment or your furniture budget, while a shortfall becomes a crisis. Set the number up properly through the Pre-Approval & Refinance Check at the same time as the deposit schedule, so one plan covers the whole build.
Frequently asked questions
How much should I budget for closing costs on a new build in Alberta?
A common lender planning standard is about 1.5% of the purchase price for closing costs beyond the down payment, plus GST on the new home itself where the contract price is quoted plus GST. Your builder contract’s specific charges decide the real figure — itemize it rather than relying on the rule of thumb alone.
Does Alberta charge land transfer tax?
No. Alberta does not levy a provincial land transfer tax, though Land Titles registration fees apply. That is a material saving compared with Ontario or British Columbia purchases.
Can closing costs be added to my mortgage?
Generally no — closing costs and any GST owing must be available from your own funds at closing, which is why lenders verify them. Some insured programs have limited flexibility products, but the safe plan is cash on hand.
Building new in Edmonton and want your funds-to-close number calculated from your actual contract? Call (780) 720-8240 — I will try to call you this week, or reply with a good time and we will set a phone appointment to itemize it line by line.
By Travis Bannert, Realtor and Mortgage Broker
Travis Bannert, Mortgage Broker | Next Door Mortgages, BFL Dominion Lending Centres | (780) 720-8240 | nextdoormortgages.com