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Straight answers
The questions people ask most about starting and running a home building business in Ontario. Answered straight, with links to the official sources.
Yes — building or selling new homes requires an HCRA builder/vendor licence, and every home must be enrolled with Tarion for the statutory warranty. It's one of the only construction activities in Ontario with a real licensing gate, including competency requirements and a financial review. You can't just incorporate and start selling houses.
Custom (building on a client's land, client-funded) is the lower-capital entry — you're not carrying land or market risk, but you carry intense client management. Spec (build to sell) has the highest upside and the highest risk — you own the land, the financing, and the market exposure. Most builders start custom to build a track record and capital, then move toward spec or development.
It's developer economics, not a wage. On custom, you're paid through draws against progress (managing the cash gap before each draw is the skill). On spec, you finance land and construction and realize profit at the sale — so your money is tied up and at market risk for the whole build. Financing, land cost, and warranty liability are the levers that decide whether you make money.
It's a real, long-tail exposure. Ontario's statutory warranty runs 1 year comprehensive, 2 years on systems and water penetration, and 7 years on major structural — and you, the builder, are on the hook for claims across that whole window. A bad batch of homes or a systemic defect can generate claims (and costs) years after you've banked the profit, which is why quality and proper enrolment aren't optional.
Overlapping but distinct. A GC builds and renovates broadly and isn't necessarily licensed to build new homes for sale. A new-home builder is specifically HCRA-licensed and Tarion-enrolled to build and sell (or contract-build) new homes, carrying the warranty obligations. Many home builders are GCs who took on the licensing to do new construction.
Build a track record first — most licensed builders came up through renovation, custom carpentry, or supervising other people's builds. Then meet the HCRA competency and financial requirements, license the company, and enrol your homes with Tarion. Start with custom or a single spec build to prove delivery before you scale into volume or development.
Yes. Building or selling new homes requires a builder/vendor licence from the Home Construction Regulatory Authority (HCRA), and each home must be enrolled with Tarion for warranty coverage. This is one of the few construction activities in Ontario with a mandatory provincial licence.
HCRA licenses and regulates the builders and vendors themselves — competency, conduct, and eligibility. Tarion administers the statutory new-home warranty that protects buyers. You must be licensed by HCRA and enrol each home with Tarion before construction or sale.
Costs include HCRA application and annual licensing fees, Tarion enrolment fees per home, competency/education requirements, and a financial review — on top of standard incorporation, insurance, and WSIB. Budget for several thousand dollars in first-year licensing and warranty costs before a single home is sold.
Building on land you do not own (a contract build on the owner's lot) can change the licensing picture, but many such builds still fall under HCRA and Tarion. The rules around "contract homes" and owner-built homes are specific — confirm your exact situation with HCRA before contracting.
Ontario's statutory new-home warranty (administered by Tarion) generally provides 1 year of comprehensive coverage, 2 years on systems like plumbing/electrical/HVAC and water penetration, and 7 years on major structural defects. As the builder you are responsible for honouring claims within those periods.
A sole proprietorship is cheaper and simpler to start, but you are personally liable for the business's debts and claims. Incorporating creates a separate legal entity that limits personal liability, can reduce tax once you are profitable, and reads as more credible to larger clients. Most contractors incorporate once they have employees, real revenue, or work on others' property.
Yes — construction is a mandatory WSIB sector in Ontario. Even independent operators and partners with no employees generally must register, and clients and general contractors will require a valid WSIB clearance certificate before you can work on their site.
You must register for and charge HST once your revenue exceeds $30,000 over four consecutive quarters. Many contractors register before that threshold so they can claim input tax credits on tools, materials, and vehicles from day one.
Ontario's Construction Act sets the rules: a 10% holdback on most contracts, prompt-payment timelines (you must be paid within set periods after a proper invoice), and an adjudication process for disputes. Understanding holdback, lien rights, and prompt payment is essential to protecting your cash flow.