What is a pre-construction assignment sale?
An assignment transfers a buyer’s rights and obligations under an agreement of purchase and sale before title closes. The original buyer is the assignor; the replacement buyer is the assignee. The builder still delivers the home under the original agreement, subject to the approved assignment terms.
An assignment is not the same as selling a property you already own. You are transferring a contract, so the contract controls what is permitted.
Do you need the builder’s consent?
Usually. Many agreements require written consent, charge an administration fee and restrict public advertising or MLS exposure. Some projects advertise a free assignment as an incentive, but that can still be subject to timing, legal review and builder approval.
Before listing, have a lawyer confirm whether assignment is allowed, when consent can be requested, what documents are needed and who pays the fee. A project page such as Aura at Lakeview Village may summarize an incentive, but only the signed schedule determines your rights.
How are assignment profits taxed?
The Canada Revenue Agency says profit from buying real estate with an intention to resell is generally business income. Its real-estate profit guidance explains why intent and conduct matter.
The residential property flipping rule can also deem profit on certain dispositions held for less than 365 days to be business income, subject to legislated exceptions. Do not assume capital-gains treatment. Ask a tax professional to review the facts before setting your net-price target.
Does HST apply to an assignment?
Since May 7, 2022, GST/HST generally applies to assignment sales of new or substantially renovated residential housing. CRA’s GI-120 assignment guide explains the treatment, including consideration and deposit reimbursement.
The accounting can be counterintuitive. State clearly whether the assignment price is inclusive or exclusive of HST, and have counsel draft the payment mechanics.
What should sellers prepare?
Collect the original agreement, amendments, receipts, builder correspondence and incentive schedules. Calculate deposits paid, deposits still due, builder fees, legal fees, tax and the desired net proceeds. The assignee should independently qualify for financing and review the underlying purchase.
Broker’s bottom line
Start with permission, not promotion. Confirm builder consent and advertising rules, obtain tax advice, then market the contractual position accurately. An attractive gross assignment profit can shrink quickly after HST, income tax and fees. Calculate the net proceeds before accepting an offer. Keep written copies of the builder consent, tax advice and final assignment statement with your permanent records.