July 7, 2025 | Rural

Buying Land in Ontario to Build a House: What to Know

Share This Post:
Buying Land in Ontario to Build a House: What to Know

Taking your blueprints into a reality – there is no better feeling than that. More Ontarian’s are taking the leap and choosing to build their homes from the ground up; which is entirely understandable because think of all the finishes, design elements and personalized touches you admire and then imagine creating a home that embodies that exactly.

It might sound too good to be true but this post is going to walk you through building a house on bought land in Ontario and the basic need to know along the way!

Why Buy Vacant Land in Ontario?

First, here are some reasons building your own home might be the best option for you! These are the primary reasons why more Ontarians are choosing to build:

Create Your Dream Home

We are all too familiar with the cookie-cutter subdivisions where someone could spin you around 10 times and you wouldn’t be able to tell the difference between your neighbor’s house from yours. The truth is, unless you are signing with a well-established/reliable builder who is promoting new build communities that are customizable and catered to your preferences, you could very well end up in a home that is reliable yet basic.

When you opt into building your own home, there is endless creative freedom; this means that the grand foyer you have been dreaming of, farmers sink with a picture perfect window view or dream primary suite with a stunning walk-in-closet doesn’t just have to live on your Pinterest board for all of eternity.

Make a Solid Investment

The second reason why Ontarians are opting to build a home vs buying a new build is the investment. Investing in purchasing land, particularly land that is severable is a great bonus to building a home! When you are exploring your options, consider the bonus of renting land to a farmer or business and why this could help offset your property taxes/mortgage or building costs.

Working with the right Real Estate agent will give you a major edge, particularly if you are looking for a rural property. There is practically endless potential when it comes to rural land, and that is why we have designated Sales Representatives who understand Agricultural farm/residential properties.

Privacy & Rural Living

More to that, the third top reason behind building your home is privacy. Privacy in today’s landscape is truly a luxury. Finding land within major/thriving cities that hasn’t been planned for development is a rare commodity. If you are planning to build, you might have a community or a specific vision in mind. As agents, we want to help turn this vision into reality.

This is why we farm out communities to find prospective sellers in your designated area and capitalize on our internal Real Estate boards, home to agents across the country.


Thinking about buying a rural home? Check out these related blogs next!


How to Buy Land in Ontario

Whether you are looking for a large piece of land with a dreamy winding driveway, or settling for a custom home in the heart of Guelph so your kids can attend some of the best schools and be close to their sports and friends/family, we are here to help.

Here is the first step when starting your journey of building a home

Understand the Zoning and Regulations

Zoning indicates the building possibilities on a particular piece of land. Residential zoning is ideal for building a home in the city or on the outskirts of the countryside. When you begin to get into Agricultural and Rural zoning, other doors start to open up.

Depending on the designation, many rural properties have the capacity within that zoning designation to have outbuildings, garages and inlaw suites. Another one of our blog posts talked about the rise of Additional Dwelling Units, and these are a great option too for multi-generational living.

However, there are other types of zoning that you will want to watch out for because they limit your options in terms of building on the property based on the code. The first of these is land sanctioned for Environmental Protection, this means that the habitat on this land is reserved and must remain untouched.

If you are purchasing a property on a river for example, some of this land might be protected lands by your local conservation authority or potentially be restricted due to the wet nature of the soil and unpredictability of the water levels.

This is often why homes that have larger ponds or wet lands running through the property require the due diligence of a professional. It is always recommended that buyers hire a Realtor who can help navigate the ins and outs of their land.

Is it Build Ready?

The second step you have to consider when building your home in Ontario is whether the land is “Build Ready” There are a few key services you will want to confirm before you sign off on any paperwork!

Check the listing directly or have your Realtor speak to the current owner regarding the availability or current use of:

  • Heat
  • Hydro
  • Water
  • Sewage
  • Gas
  • Internet and Phone

The same way you would check on utilities when you are buying into an apartment building is the same way you will want to examine the land you are looking into.

Without these basic utilities, installations can become costly and small things like this will make a big difference in terms of the long-term functionality of your land. Rural and Urban lots are also very different. If you are planning on building within a town such as St. Jacobs, Kitchener or Waterloo, these areas will have access to water, heat and hydro.

However, let’s say you are planning on building in Fergus or Elora, then you will want to confirm the water and sewage to see if number one is available and number two, how safe the current condition of the system is (and if it needs to be inspected or upgraded).

Mortgages For Vacant Land

The third step you are planning on building a house is taking into account the financing that applies to raw land. Traditional mortgages may not apply because vacant land requires different approaches. Although this may sound confusing, it is actually quite straightforward. The first option is land loans.

Land Loans traditionally have higher down payments, higher interest rates because of the increased risk for the lender. Construction loans allow you to own the land and are typically a short-term loan that is used to finance a portion of the build. It is different from a traditional mortgage because it disperses the funds in stages as the build progresses. It is a great supplementary option if you are looking for a short-term loan.

Key to the process of securing financing is a solid credit score and a detailed building plan. When you go to a traditional financial institution to obtain a loan, these are two things that they will require as proof of your goodwill.

Budgeting For More Than Land

The Fourth step in building a home in Ontario is ensuring that you budget for more than just the land. There are many unexpected fees such as: development charges, site prep, tree clearing and grading, as well as a driveway installation. It is KEY to always build a buffer, this buffer should account for anywhere between 10-20% of your budget as an allocation for unexpected costs.

Planning ahead is the best way to prepare for the unknown. Variables such as land, services, permits, construction and contingencies are all common costs associated with building a home in vacant land.

Additionally, there is the permit and legal process. This seems to be the most nitty-gritty one, and it is true. This step is where it all comes together and you can really see your vision come to life. The steps this process includes are:

  • Applying for a building permit
  • Meeting environmental assessments
  • Planning out architectural drawings

All of these documents are essential proof that you will need to back up the legal side of your project, particularly for any municipality or conservation authority. Having the proper permits assures that your development is sound and set to begin the building process.


Buying land to start a farm or build a house? Check out these other blogs next!


Should You Buy Land in Ontario?

Is building a home right for you? With this blog and the advice from a seasoned Real Estate Salesperson, you will be able to determine that!

Hiring the right people will make sure that the home you keep dreaming of is the home you will soon have the keys to. We have a private network of recommended builders, contractors and more. If you are looking for expert advice, we are here to ease your mind and make this move the most seamless process possible.

So if you find yourself here, there is a good chance that you are committed to building a home, the same way we are committed to helping you find a property that feels right for you.

Reach out to us today to start the conversation: info@capstonereps.com or call us at 519-824-9050.

Ready to Get Started?

Thinking about buying or selling a home in Guelph or Wellington County? Start the conversation with our team today.

Get in Touch

Get The Newsletter

Join our mailing list to continue the real estate conversation. Get regular updates from our experts about new listings, market advice, and important industry changes you need to know.