In an assignment sale, a buyer who has signed an agreement with a builder sells that agreement to someone else before the home is finished. The property itself is not sold, because the first buyer does not own it yet. What changes hands is the right to complete the purchase. Law Wise acts for assignors and assignees on pre-construction home and condo assignments across the entire GTA and Ontario, from its office in Mississauga.
How a property assignment works
There are three parties. The assignor is the original buyer. The assignee is the new buyer. The builder remains the owner of the property until the final closing and is still the seller under the original agreement of purchase and sale.
- Check the original agreementMost builder agreements forbid assignment without the builder’s written consent, and many restrict advertising the unit for sale.
- Agree on termsThe assignor and assignee sign an assignment agreement that sets the price, the repayment of deposits and who pays which costs.
- Builder’s consentThe builder approves the assignee, usually for a fee, and signs a consent setting its conditions.
- Payment to the assignorThe assignee pays the assignor as the assignment agreement provides, often with part held back until the final closing.
- Final closingWhen the home is complete, the assignee closes with the builder, pays the balance due under the original agreement and takes title.
The assignee steps into the original agreement as it stands: the price, the closing adjustments, the occupancy fees, the deadlines and every other term the assignor agreed to. The assignee should therefore have the original agreement, its amendments and the builder’s disclosure reviewed as carefully as if signing it new.
The builder’s consent
The builder controls whether an assignment can happen. Some agreements prohibit assignment outright, some allow it with consent the builder is free to refuse, and some allow one assignment for a set fee. If the agreement is silent or strict, the time to ask for an assignment right was before signing, which is one reason to have a builder’s agreement reviewed during the cooling-off period. See new construction purchases.
Even with consent, the assignor usually stays responsible to the builder if the assignee does not close, unless the builder agrees in writing to release the assignor. An assignor should know which of these applies before spending the proceeds.
HST on an assignment sale
Since 7 May 2022, every assignment sale of a newly built home or condominium unit bought from a builder is taxable for GST/HST purposes, whatever the assignor’s reason for buying. In Ontario that means HST of 13% on the assignment price. The assignment agreement should say whether the price includes HST and who pays it, because an assignor who has not allowed for the tax may end up remitting it out of the proceeds.
The deposit and the rebates
- Deposit. If the assignment agreement states in writing that part of the price reimburses the deposit the assignor paid to the builder, that part is left out of the amount on which HST is calculated. If the agreement does not say so, nothing is left out.
- New housing rebates. The assignor is not eligible for the GST/HST new housing rebate. An assignee who is an individual and will live in the home may be, and may apply to the Canada Revenue Agency directly.
- Ontario’s 2026 enhanced rebate. After an assignment, the temporary enhanced rebate is available only if both the original agreement and the assignment agreement are signed between 1 April 2026 and 31 March 2027. An agreement signed before 1 April 2026 does not qualify because it is assigned later.
Sources: Excise Tax Act, RSC 1985, c E-15, s 192.1, as it read on 10 October 2026; Canada Revenue Agency, GST/HST Info Sheet GI-120 (notice of 7 May 2022 change) and GST/HST Notice 346 (August 2026).
Income tax and land transfer tax
The Canada Revenue Agency’s published position is that profit from an assignment sale must be reported as business income in the year of the assignment. That is different from the way a gain on a home you have lived in is usually treated, so an assignor should speak with an accountant before agreeing on a price. Land transfer tax is paid by the assignee on the final closing. Ask how the amount paid to the assignor affects the calculation in your case.
What each side should have in writing
- Assignor: when and how the price is paid, security for any amount paid later, who pays the builder’s consent fee and the HST, and whether the builder has released you.
- Assignee: a complete copy of the original agreement and all amendments, confirmation of the deposits paid and credited, a cap or estimate of closing adjustments, and the status of occupancy fees.
- Both: what happens if the builder refuses consent, delays the project or cancels it.
How Law Wise helps
- reviews the original builder’s agreement to see whether, and on what terms, it can be assigned
- drafts or reviews the assignment agreement
- deals with the builder’s lawyer on consent and its conditions
- explains the HST position and works with your accountant on income tax
- acts for the assignee on the interim occupancy and final closings
Your file is handled by a Law Wise lawyer licensed by the Law Society of Ontario. Service is available in English, Urdu, Punjabi and Hindi, and, if you retain the firm, fees are explained and confirmed in writing before work starts.
Common questions about assignment sales
Can I assign my pre-construction condo?
Only if your agreement with the builder allows it, and almost always only with the builder’s written consent. Read the assignment clause first. Some agreements also restrict advertising the unit for resale.
Is the builder’s consent fee negotiable?
Sometimes, but mainly before the original agreement is signed. After that the builder is entitled to rely on what the agreement says, although builders do agree to changes case by case.
Is HST charged on an assignment sale?
Yes. Since 7 May 2022 all assignments of agreements to buy newly built homes and condominium units from a builder are taxable. The part of the price that the assignment agreement identifies in writing as reimbursement of the deposit is left out of the calculation.
Does the assignee get credit for the deposits the assignor paid?
The deposits stay with the builder and are credited toward the price on final closing. The assignee normally reimburses the assignor for them as part of the assignment price, and the agreement should say so clearly.
Am I still liable after I assign my agreement?
Usually, yes. Unless the builder releases you in writing, you remain responsible to the builder if the assignee fails to close.
I assigned at a loss. Do I still have to deal with tax?
HST applies to the assignment price whether or not you made a profit, apart from the deposit portion identified in the agreement. Income tax depends on your circumstances. Ask an accountant how a loss is treated.
Thinking about an assignment?
Send us the builder’s agreement before you sign an assignment. The first consultation is free for 15 minutes, by appointment.
This page is general legal information for Ontario, current as of 10 October 2026. It is not legal advice and does not create a lawyer-client relationship. For advice about your situation, please speak with a lawyer.