What Is an Assignment Sale? How They Work in Ontario

An assignment sale is the sale of a contract, not a home. The original buyer of a pre-construction unit (the assignor) transfers their rights and obligations under the agreement of purchase and sale to a new buyer (the assignee) before the home closes. The assignee steps into the original deal, pays the original contract price to the builder at closing, and usually reimburses the assignor's deposits plus any agreed difference. Nothing about the home itself changes. What changes hands is the paper.

We arrange and review assignments for buyers across the GTA, and the same questions come up every time. Here is the full picture.

Why assignment sales exist

Pre-construction homes take years to build. A buyer who signed in 2022 may close in 2026, and life moves in between: a job change, a growing family, financing that no longer fits. The assignment clause in the original agreement is the exit. Instead of closing on a home they no longer want, the original buyer sells their position in the contract to someone who does.

For the new buyer, an assignment can mean getting into a project that sold out years ago, on a home that is nearly finished, without waiting through a full construction cycle. In a soft market, assignments sometimes list below what the same floor plan would cost from the builder today. In a rising market, the opposite happens. Neither is guaranteed, and we never frame an assignment as an investment play. It is a way to buy a specific home on specific terms, and the terms are everything.

What you are actually buying

This is the part most first-time assignees miss. You are not buying a condo or a house. You are buying the assignor's position in a contract with the builder. That means:

• You inherit every term of the original agreement of purchase and sale, including the closing date, deposit obligations, adjustments, and any caps (or lack of caps) on development charges and levies.
• The purchase price you register on title at closing is the original contract price, not the price you paid the assignor. Your mortgage lender will look at both numbers.
• The 10 day cooling-off period under Ontario's Condominium Act applies to the original purchase from the builder. It does not restart for an assignment. Once you sign an assignment agreement, you are generally committed on the terms it sets out.

Before anything is signed, your lawyer should read the original agreement front to back. In our experience the original APS matters more than the assignment agreement itself, because everything in it becomes your problem after the transfer.

How an assignment sale works, step by step

A typical Ontario assignment runs like this:

1. The assignor confirms their agreement allows assignment. Most builder agreements permit it only with the builder's written consent, and some prohibit advertising the assignment on MLS or publicly.
2. The assignor finds an assignee, usually through a brokerage that handles assignments quietly within builder rules.
3. Both sides negotiate the assignment price. This usually covers the deposits already paid to the builder plus a negotiated amount above or below that, depending on the market.
4. The builder reviews the assignee's qualifications and issues consent. Builders commonly charge an assignment fee for this, set out in the original agreement. The amount varies by builder and by project, so check the APS rather than assuming a number.
5. Lawyers for both sides paper the assignment agreement, and the assignee's lender confirms financing based on the full picture.
6. At final closing, the assignee completes the purchase with the builder, pays the balance under the original contract, and takes title.

On a condo, there is often an interim occupancy period before final closing. If the assignment happens after occupancy begins, the builder's consent becomes harder to get and the tax picture changes, so most assignments are done before occupancy.

HST on assignment sales

The tax rules here changed in 2022 and still catch people off guard. For assignment agreements entered into on or after May 7, 2022, every assignment sale of a new or substantially renovated home is taxable for GST/HST purposes. It does not matter whether the assignor is a professional or a family selling for personal reasons.

Two details matter in practice:

• HST applies to the assignment amount, but the portion that reimburses deposits the assignor already paid to the builder is excluded, as long as the assignment agreement states that in writing. Your lawyer should make sure that language is in the agreement.
• The assignor is generally responsible for collecting and remitting the tax. If the assignor is a non-resident of Canada, the assignee must self-assess and pay the CRA directly.

Assignees should also get advice on the new housing rebate before closing, because who occupies the home and when can affect eligibility. We cover the rebate itself in our HST rebate guide.

What the assignee takes on at closing

Budget for the full chain, not just the assignment price:

• Reimbursing the assignor's deposits, often 15 to 20% of the original price on a condo.
• The balance of the original purchase price, due to the builder at final closing.
• Closing adjustments under the original agreement: development charges and levies (capped or not), utility hookups, Tarion enrolment, and lawyer fees.
• Land transfer tax on closing, calculated on the full consideration. In Toronto, that includes the municipal land transfer tax as well.

One piece of good news: Ontario's new home warranty attaches to the home, not to the original buyer. Tarion's post-possession coverage (1 year, 2 year, and 7 year) protects whoever owns the home when a defect appears.

The risks, honestly

For assignees: you are buying without the protections of a fresh builder contract. No new cooling-off period, no renegotiated terms, and if the assignor's original deal had weak caps on closing adjustments, those are now yours. Financing can also be harder, since some lenders will not lend against the assignment premium.

For assignors: builder consent is not automatic, marketing restrictions are real, and the HST and income tax treatment of your gain depends on your situation. The CRA looks closely at assignment flips, and profit is frequently taxed as business income rather than capital gain. Get tax advice before you list, not after.

Assignment vs buying from the builder or resale

Where does an assignment fit against the alternatives? Buying directly from the builder in a new release gets you a fresh contract, the condo cooling-off period, and current incentives, but you wait through the full build. Resale gets you a finished home you can inspect, but in a new community the resale supply may be years away. An assignment sits between: a nearly finished home in a sold-out project, on someone else's contract terms.

The honest comparison comes down to the numbers on the specific deal. Price the assignment against what the builder is charging today for comparable inventory, including current incentives, then subtract the certainty you give up by inheriting an old contract. Some assignments are genuine value. Others only look cheap until you read the adjustment clauses. This is exactly the comparison we run for buyers before they offer.

Where a buyer's broker fits

We represent the buyer, never the developer. On an assignment, that means pulling the original APS apart before you commit, pressure-testing the adjustment caps, confirming the builder's consent requirements and fee, and coordinating with your lawyer and lender so nothing surfaces at closing. Assignments reward the prepared and punish the rushed.

If you would rather buy directly from the builder in the first release window, register for pre-construction alerts and we will send you price lists and floor plans for new launches in cities like Brampton and Mississauga before the public launch. Free to register, no obligation. We are paid by the builder, not by you.