Assignment Sale in Ontario: How It Works, HST, Taxes and Legal Steps
What Is an Assignment Sale?
The assignor
The assignee
The builder
The lawyers
Can Your Agreement Be Assigned?
- Whether the builder’s consent is needed, and whether it can be refused.
- What fee the builder charges, and who pays it. That is a term you and the buyer agree on.
- Any conditions, such as payments that must be up to date or forms the builder requires.
- Whether every person named as a buyer in the original agreement must sign.
How an Assignment Sale Works
Read the assignment clause
Ask the builder for consent
Agree the price and terms with the buyer
Have the documents prepared
The buyer closes with the builder
For a condo, the buyer usually takes occupancy at interim closing and closes after the condominium registers. See our interim closing service. The builder transfers title to the buyer.
HST on an Assignment Sale
Since May 2022, an assignment sale of a new house or condo unit is taxable even when an individual is selling. The rule is in section 192.1 of the Excise Tax Act and the CRA’s Notice 323.
Assignments on or before May 6, 2022 follow the earlier rule, which depended on the original buyer’s main reason for signing. See CRA, GI-120.
Income Tax for the Seller
Selling an agreement for more than you paid creates a profit. The CRA’s flipped property rules apply to dispositions on or after January 1, 2023. If you held the agreement, or any right to buy a housing unit, for fewer than 365 consecutive days, the profit is deemed business income and fully taxable. The rules cover assignment sales. See CRA, Income Tax Folio S1-F3-C2, paragraphs 2.6.1 to 2.6.6.
- You cannot treat the profit as a capital gain, and the principal residence exemption is not available.
- A business loss on a flipped property is deemed to be nil.
- The rule does not apply when the sale is due to, or in anticipation of, a listed life event, such as a death, a change in household, a relationship breakdown, a serious illness or disability, an eligible relocation, an involuntary job loss or insolvency.
- After 365 days, or when a life event applies, whether the profit is business income remains a question of fact.
Land Transfer Tax and Other Costs for the Buyer
The buyer pays more than the builder’s price. Ontario’s guidance says the consideration for the transfer to the assignee includes the consideration for the assignment, the purchase price in the assigned agreement, and the value of extras, upgrades and installations. See Ontario.ca, new homes. Your lawyer works out the figure for your deal. Properties in the City of Toronto also attract the municipal land transfer tax. See our land transfer tax guide.
- The assignment price paid to the seller, plus the HST on the assignment.
- The balance of the builder’s price and the HST in it, paid at closing, with any extras or upgrades.
- Land transfer tax, and the municipal tax in Toronto.
- The builder’s assignment fee, if your deal makes you pay it.
- Legal fees, disbursements and closing adjustments, including occupancy fees for a condo. Our fees are provided during the consultation. See our closing costs guide.
Rebates for the Buyer
An individual assignee who meets the conditions may qualify. The conditions are in CRA Guide RC4028. See CRA, GI-120.
For agreements entered into on or after March 20, 2025 and before 2031, up to $50,000. If the original agreement was signed before March 20, 2025, an assignee has no rebate, even if the assignment is signed later. See CRA, memorandum 19-3-10.
For an assignment, the original agreement and the assignment agreement must both be entered into from April 1, 2026 to March 31, 2027, and the other conditions must be met. It applies to homes under $1,850,000, with combined Ontario relief of up to $80,000 depending on price. See CRA, Notice 346.
Rebate rules change and depend on your dates and price, so confirm yours before you sign. Our first-time home buyer guide covers the programs for new homes.
What a Lawyer Checks Before You Sign
Sellers: the agreement and consent
Sellers: money and tax
Buyers: the paper trail
Buyers: the project and the financing
We act for assignors and assignees across Ontario, including Toronto, Vaughan and Mississauga. See our assignment of property service, our pre-construction condo service and our Tarion warranty guide. Call (647) 696-8069 or book a free consultation below. We serve clients in English, Hindi and Punjabi.
If the Builder Says No
Frequently Asked Questions
What is an assignment sale in Ontario?
An assignment sale is the sale of a pre-construction agreement of purchase and sale before the home or condo unit is finished and registered. The original buyer (the assignor) transfers the agreement to a new buyer (the assignee), who pays the agreed price, takes over the contract and closes with the builder.
Does the builder have to agree to an assignment?
Not automatically. Your agreement with the builder decides. Many agreements require the builder’s written consent and charge a fee, and some newer agreements restrict or prohibit assignments, so read the assignment clause before you promise the unit to a buyer.
Is HST charged on an assignment sale?
Yes, for assignment agreements entered into after May 6, 2022 on a new single unit residential complex or condo unit, including when the seller is an individual. The assignor generally collects the HST (13% in Ontario) and remits it to the CRA. Agreements assigned earlier follow an older rule that depended on why the original buyer signed.
Is HST charged on the deposit I get back?
Only the part of the price that solely repays the deposit you paid the builder can be left out of the taxable amount, and only if the assignment agreement says so in writing. If it does not, HST applies to the whole assignment price.
Do I pay tax on my profit from an assignment sale?
Often yes. If you held the agreement for fewer than 365 consecutive days, the profit is deemed business income and a loss is deemed nil, unless a listed life event applies. After 365 days, whether the profit is business income or a capital gain depends on the facts. Speak with an accountant about your own return.
Is land transfer tax payable on an assignment?
Land transfer tax is payable on the transfer to the buyer at final closing. Ontario’s guidance says the amount taxed includes the consideration for the assignment, the purchase price in the assigned agreement and the value of extras and upgrades. Properties in the City of Toronto also attract the municipal tax.
Can an assignee get the first-time home buyer GST/HST rebate?
Only if the original agreement was signed on or after March 20, 2025. If it was signed earlier, the CRA treats an assigned agreement as signed before that date, so the assignee has no rebate even if the assignment itself is signed later.
Can an assignee get the Ontario Enhanced New Housing Rebate?
For an assignment, the original agreement and the assignment agreement must both be entered into from April 1, 2026 to March 31, 2027, and the other conditions must be met. Check the CRA notice for your price and dates.
What happens if the builder refuses to consent?
Without the builder’s consent, an assignment that your agreement requires it to approve is not safe to complete. Ask for the builder’s answer in writing and have a lawyer read the clause. Your options depend on the agreement and may include closing the purchase yourself and selling the finished unit.
Is an assignment sale the same as selling a home after closing?
No. In an assignment you sell your contract with the builder, and the buyer receives title from the builder at closing. When you sell after closing, you own the title and transfer it to the buyer yourself.
Related Guides
Legal Information, Not Legal Advice. This guide summarizes information published by the Canada Revenue Agency, Justice Canada and the Government of Ontario, checked on November 6, 2026. Tax rules and rebates change and depend on the dates of your agreement and your assignment, so confirm your own situation with a real estate lawyer and an accountant before you rely on this guide.