What Is an Assignment Sale?

An assignment sale is one of the more misunderstood corners of Ontario real estate. Instead of selling a finished home, the original buyer sells their contract to buy a not-yet-completed property — usually a pre-construction condo — to a new buyer before the building closes. Done right, it can be an opportunity for both sides. Done carelessly, it's a tangle of fees, taxes and conditions. Here's how assignment sales actually work.

Key takeaways

• In an assignment sale, the original buyer (assignor) transfers their purchase contract to a new buyer (assignee) before closing.
• It's most common with pre-construction condos that haven't been completed or registered yet.
• The builder must usually consent, and may charge an assignment fee.
• Tax treatment can be complex — get legal and tax advice before signing.
• Eligible HOMEH buyers can receive the industry's highest Cashback Rebate.

What an assignment sale is

When you buy a pre-construction condo, you don't get a finished home — you sign a contract with the builder to buy a unit that will be built. If, before the building is completed and registered, the original buyer wants out, they can sell that contract to someone else. That transfer of the contract is an assignment sale.

The original buyer is the assignor; the new buyer is the assignee. The assignee steps into the assignor's shoes — taking over the obligation to close with the builder when the unit is ready. To understand the underlying purchase, see our guide to buying a pre-construction condo in Ontario.

Why people sell — and buy — on assignment

Sellers (assignors) turn to assignment for plenty of reasons: their circumstances changed, they can no longer close, or they want to realize gains before the building registers. Buyers (assignees) may see value in a unit that's nearly finished, or in a sold-out building they couldn't otherwise access.

• For the assignor: an exit before final closing, without taking title first.
• For the assignee: access to a sold-out or nearly complete building.
• For both: a negotiated price that reflects how the project has progressed.

The builder holds the keys

You usually can't assign a pre-construction contract freely. The original agreement with the builder almost always requires the builder's consent to assign, and builders frequently charge an assignment fee for permitting it. Some restrict assignments entirely, or only allow them after certain milestones.

Read the original agreement first

Before listing or buying an assignment, the builder's purchase agreement must be reviewed by a lawyer. Assignment rights, fees and restrictions are buried in that contract — and they govern whether the deal is even possible.

Costs and taxes to expect

Assignment sales carry their own cost layer on top of a normal purchase. Both sides typically need a lawyer experienced in assignments, and the tax treatment can be involved — HST and the treatment of any profit can apply differently than in a resale. This is not a do-it-yourself transaction.

Budget land transfer tax on the final close

The assignee still pays land transfer tax when the deal closes with the builder. Estimate it — and other closing costs — with the closing cost calculator.

Is an assignment right for you?

Assignments can be worthwhile, but they're more complex than a standard resale and demand experienced legal and tax advice. If you're weighing pre-construction generally against finished homes, our pre-construction condo guide and the broader buying a house in Ontario guide are good next reads.

Cashback on your purchase

Whether you buy an assignment, a resale, or a brand-new home, eligible HOMEH buyers receive the industry's highest Cashback Rebate. Browse current opportunities on the listings page and estimate your rebate with the cashback calculator.