How Assignment Sales Work in Ontario (and When They Make Sense)

When you buy a pre-construction condo, you sign an agreement of purchase and sale with the builder, but you don't take legal title until the building is registered and the unit closes — a process that can take years. An assignment sale is when the original buyer sells that agreement itself, before final closing, to a new buyer who steps into their place.

The new buyer effectively takes over the original contract: they inherit the closing date, the original purchase price paid to the builder, plus whatever premium the assignor negotiates for the assignment itself.

Life changes over a multi-year pre-construction timeline. Buyers assign for all kinds of reasons — a job relocation, a change in family plans, or simply because the unit has appreciated and they'd rather realize that gain now than carry it (and the eventual closing costs) through to final registration.

It's also, in some cases, a way to avoid double land transfer tax and other closing costs that come with taking possession and then reselling shortly after — though every situation is different and should be reviewed with a lawyer and accountant.

Almost every pre-construction agreement in Ontario prohibits assignment without the builder's written consent — and builders typically charge a fee for granting it, often in the thousands of dollars, plus their own legal costs. Some builders also restrict when an assignment can happen, or require the unit be marketed only after a certain point in construction.

Before listing a unit for assignment, read your original agreement's assignment clause carefully, or have a lawyer do it. This single clause determines what's actually possible and what it will cost.

Assignment sales have tax treatment that differs from a typical resale — HST can apply to the profit portion of an assignment in ways that surprise sellers who assume it works like selling a resale home. Financing is different too: because the new buyer isn't taking title until the building closes, traditional mortgage pre-approval works differently, and not every lender is comfortable financing an assignment purchase.

This is a transaction type where getting your accountant and mortgage professional involved early isn't optional — it's how you avoid an unpleasant surprise at closing.

For buyers, assignments can be a way to get into a specific building or unit that's no longer available directly from the builder, sometimes at a better price than current builder pricing for similar units, and with a shorter runway to closing since the building is already further along.

The trade-off is a more complex transaction with fewer standard protections than a resale purchase. If you're considering buying or selling an assignment, it's worth a conversation before you commit — the details matter more here than in almost any other type of real estate transaction.