An assignment sale in Ontario is the sale of a pre-construction property — most commonly a condo — before the original buyer ever takes possession, transferring their rights and obligations under the original purchase agreement to a new buyer instead. It’s a common transaction in the GTA’s pre-construction condo market, since closing dates on new builds are often set years after the original agreement is signed, giving the original purchaser (the "assignor") an opportunity to sell their interest in the unit before it’s even built.

This guide explains how an assignment sale works, what it costs, and what both buyers and sellers should know about builder consent and HST before entering one.

How Does an Assignment Sale Work?

In a typical pre-construction purchase, a buyer signs an Agreement of Purchase and Sale with the builder, pays a series of deposits over time, and waits — often several years — for the building to be completed and the unit to close. An assignment sale lets that original buyer (the assignor) sell their contractual position to a new buyer (the assignee) before closing, rather than waiting to take possession themselves and reselling afterward on the resale market.

The assignee effectively steps into the assignor’s shoes: they take over the remaining deposit payments owed to the builder, and at final closing, they close directly with the builder as if they’d been the original purchaser — with the original purchase price, plus any additional profit paid to the assignor for the assignment itself.

An assignment sale cannot proceed without the builder’s consent — this is written into virtually every pre-construction purchase agreement in Ontario. Builders vary significantly in how they handle this:

  • Some builders restrict when an assignment can be marketed — for example, not until a certain construction milestone is reached.
  • Most builders charge a consent fee, commonly around 1% of the purchase price plus HST, though this varies by builder and should be confirmed against the specific purchase agreement.
  • Builders typically require the new assignee to qualify financially, similar to how the original buyer qualified.

Reviewing the original purchase agreement’s assignment clause — before assuming a sale can happen at all — is the first step for any assignor considering this route.

How HST Applies to Assignment Sales

Since May 7, 2022, changes to the federal Excise Tax Act made HST apply to the full amount of virtually all assignment sales of new or substantially renovated residential property in Canada, regardless of the assignor’s original intent when they purchased. In practice, this means HST is charged on the assignment sale price, and the parties need to agree — as part of the assignment agreement — on who bears that cost and how it’s calculated relative to the deposit repayment and any profit. This is a meaningfully different tax treatment than a typical resale transaction, and it’s a detail worth confirming with a real estate lawyer experienced in assignment transactions before signing anything, not something to assume based on a regular resale purchase.

What Does the Assignee Actually Pay?

An assignee in a typical assignment sale pays:

  • Reimbursement of deposits already paid by the assignor to the builder
  • Any assignment profit negotiated between the assignor and assignee, on top of the original purchase price
  • HST on the assignment sale, as outlined above, with the specific allocation between parties set out in the assignment agreement
  • The builder’s consent fee, if the assignment agreement allocates this cost to the assignee rather than the assignor

At final closing — which happens directly between the assignee and the builder — the assignee also pays the remaining balance owed under the original purchase agreement, plus standard closing costs including Ontario Land Transfer Tax, calculated the same way as any other Ontario purchase.

Assignment Sale vs. Power of Sale: Not the Same Thing

These two terms are sometimes confused, but they describe unrelated situations. An assignment sale is a voluntary transaction — the original buyer chooses to sell their pre-construction purchase agreement, usually for financial or personal reasons unrelated to any default. A power of sale, by contrast, is a lender-initiated process triggered specifically by a mortgage default on a completed, already-owned property. The only thing they share is that both are less familiar to typical resale buyers than a standard purchase, and both benefit from a lawyer experienced in that specific transaction type.

The Assignment Agreement Itself

The assignment agreement — separate from the original purchase agreement with the builder — is the contract between the assignor and assignee that sets out the assignment price, how the deposit reimbursement is calculated, who pays the builder’s consent fee, and how HST is allocated between the parties. Because this is a distinct legal document from a standard Agreement of Purchase and Sale, the conditions typically included differ too. A financing condition remains just as important as in any resale purchase — see what conditions should be in an offer for the general framework — but an assignment agreement should also address builder consent explicitly as a condition, since the deal cannot close without it regardless of what the assignor and assignee agree to between themselves.

Why Would Someone Sell an Assignment Instead of Waiting to Close?

Assignors sell for a range of reasons that have nothing to do with the property itself — a change in financial circumstances, a life change like a job relocation, or simply wanting to realize a gain on a unit that’s appreciated in value since they signed, without waiting years for the building to actually close. An assignment sale lets them exit the transaction before ever taking possession, at the cost of the HST treatment and builder consent process described above.

Risks Buyers Should Understand

Buying an assignment carries a few risks that don’t apply to a completed resale purchase:

  • You’re buying based on plans and renderings, not a finished, inspectable unit — the building may not be complete for months or years after you close on the assignment.
  • Closing dates can shift, since pre-construction closing timelines are set by the builder and can be delayed.
  • Financing an assignment works differently than a standard mortgage, since you’re financing a future closing rather than an immediate one — not every lender handles assignment purchases the same way, so confirming financing terms early in the process matters.

A real estate lawyer experienced specifically in assignment transactions — not just general residential resale — is worth engaging before signing an assignment agreement on either side of the transaction. Confirming exactly what condition the assignor believes the unit will be in at closing, and what recourse exists if the finished unit differs materially from what was marketed, is also worth addressing explicitly in the assignment agreement rather than assuming it mirrors a standard resale purchase.

FAQ

Is an assignment sale the same as buying a resale condo?

No. An assignment sale transfers a purchase agreement for a not-yet-completed property directly from the original buyer to a new buyer, who then closes with the builder. A resale condo purchase involves a completed, already-owned unit closing between two parties in the normal way.

Do I need the builder’s permission to sell my pre-construction unit?

Yes. Virtually every pre-construction purchase agreement in Ontario requires builder consent before an assignment sale can proceed, often with restrictions on timing and a consent fee.

Who pays HST on an assignment sale?

HST applies to the assignment sale amount under federal rules in effect since May 2022. The assignment agreement specifies which party — assignor or assignee — is responsible for it, so this should be negotiated and documented clearly rather than assumed.

Can I get a mortgage for an assignment purchase?

Yes, though financing an assignment works differently than a standard resale mortgage since you’re financing a future closing. Confirm terms with your lender or mortgage broker early, since not every lender handles assignment purchases identically.

What happens to my deposits if I sell an assignment?

The new buyer (assignee) reimburses the original buyer (assignor) for deposits already paid to the builder, as part of the assignment transaction, in addition to any negotiated profit.

Is assignment selling risky?

It carries specific risks — builder consent isn’t guaranteed, HST treatment is more complex than a standard resale, and closing timelines depend on construction progress. Working with a lawyer experienced in assignment transactions specifically helps manage these risks on both sides.

Can a builder refuse to allow an assignment?

In practice, builders rarely refuse outright, but they can restrict timing — for example, requiring a construction milestone to be reached first — and require the new buyer to qualify financially before granting consent. Reviewing the specific purchase agreement’s assignment clause is the only way to know the exact restrictions that apply.

To see completed condo listings instead of pre-construction assignments, browse current condos for sale across the GTA on Condohill.

Sources

HST treatment reflects federal Excise Tax Act changes effective May 7, 2022. For the underlying legislation, see the Excise Tax Act on the Government of Canada’s Justice Laws website, and for general new-home buyer protections in Ontario, see the Government of Ontario’s consumer protection resources for new home owners.