What assignments are, how developer consent works, why you can't list on MLS, and the HST and tax implications for buyers and sellers.
An assignment sale is the transfer of the right to purchase a pre-construction condo from the original buyer to a new buyer, before the building is registered as a condominium. The original buyer (the assignor) sells their interest in the Agreement of Purchase and Sale to a new purchaser (the assignee). The developer remains the seller of the unit, and the assignee completes the purchase directly with the developer at final closing.
Assignment sales are the only way to sell a pre-construction condo interest before the building registers. Resale is not possible until after registration because there's no title to transfer yet. If you're looking to exit a pre-construction purchase before closing, an assignment is your primary option.
The most common reasons are changed life circumstances, financing problems, or a decision to take profits on a unit that has appreciated significantly since signing. Someone who bought a unit at $700,000 in 2021 may be sitting on a contract worth $900,000 at 2026 values, and a firm sale is more attractive than waiting for final closing and carrying costs.
Some buyers also sign pre-construction units specifically intending to assign before closing. This is a speculative strategy, and it works when the market rises between signing and occupancy. It doesn't work when the market declines, because you can't assign at a loss and expect developers to approve the transfer readily.
Your right to assign is determined entirely by your original Agreement of Purchase and Sale. Most developers require written consent to assign. The BILD standard form APS requires developer consent for all assignments except to an immediate family member or spouse.
Developers may refuse consent, charge an assignment fee (typically $2,000-$10,000), or impose conditions on the assignee. Some developers restrict assignments entirely during the pre-construction phase to protect against investors flipping units and undermining their pricing. Others routinely approve them for a fee. The APS is the document that controls what you're entitled to do.
If you're buying a pre-construction unit with the intention of potentially assigning it, your lawyer must review the assignment clause before you sign the original APS. An assignment restriction you didn't read is not a defense. Confirm developer consent requirements, any applicable fees, and whether advertising restrictions apply before you commit.
Assignment sales cannot be listed on MLS (Multiple Listing Service) in Ontario. CREA rules prohibit listing an interest in an APS as a property for sale on MLS, because there is no property title to list. This means the market for assignments is fragmented and less transparent than the resale market.
Assignments are typically marketed through agent networks, assignment-specific databases, and word of mouth. Some developers also maintain internal lists of buyers interested in purchasing assignments. This illiquidity is one of the real risks of the assignment market: finding a buyer takes longer, and pricing is less reliable when you have no MLS comparables.
The tax treatment of assignment sales changed materially on May 7, 2022. The Canada Revenue Agency now treats the profit portion of an assignment sale as subject to HST. The CRA's position is that the assignor is making a taxable supply, and HST applies to the gain over the original purchase price.
Before that date, many assignments were treated as exempt or as capital gains. The current position is significantly less favorable for assignors. The CRA's guide on assignments (GI-120) sets out the current rules. Consult a tax professional before completing an assignment sale, as the HST liability can be significant on a profitable transaction.
For the assignee, there are also considerations around HST on the new home purchase itself. New construction condos are subject to HST, with a partial rebate available for primary residence purchasers. The assignment changes the structure of who pays and how, and your lawyer needs to address this in the assignment agreement.
Buying an assignment means assuming the obligations of the original APS. You're stepping into a contract with a developer you may not have dealt with before, on terms you didn't negotiate. The original buyer may have selected upgrades, negotiated incentives, or agreed to terms you're now bound by. Your lawyer must review the full original APS, not just the assignment agreement.
You're also buying something that doesn't exist yet. The building isn't built, the occupancy date isn't guaranteed, and the final unit may differ from what the assignor bought. All the risks of pre-construction, including permitted delays and developer changes, transfer to you as the assignee.
As an assignment buyer: confirm the developer's consent to the assignment in writing before you commit. Have your lawyer review the full original APS to understand every obligation you're assuming. Confirm the deposit amounts paid by the assignor and how they'll be structured at final closing. Understand the HST treatment on both the assignment and the final purchase. Check the developer's closing cost schedules so there are no surprises at final closing.
Not all agents are experienced with assignment transactions. The paperwork is more complex than a standard resale deal, the marketing channels are different, and the tax questions require specific knowledge. If you're buying or selling an assignment in Toronto, work with an agent who has done multiple assignment transactions. CondosAgent.com lists condo specialists in Toronto who handle pre-construction and assignment work.
Read the complete pre-construction guide, from signing to final closing.
Pre-Construction Guide