Assignment sales: how Canadian lenders actually treat them.

The original purchaser (the assignor) signed a purchase agreement with a builder, usually years before the unit is ready, and paid a deposit along the way. Before the building closes, the assignor sells their position in that contract — their right to eventually take title — to a new buyer (the assignee), typically for the original price plus a premium reflecting any increase in market value since the original agreement was signed.

The builder has to consent to the assignment, since the original agreement is between the builder and the assignor. Once the assignment is registered with the builder's consent, the assignee steps into the assignor's shoes and eventually closes the purchase directly with the builder when the building is complete.

Since May 7, 2022, essentially all assignment sales of newly constructed or substantially renovated residential housing are taxable for GST/HST purposes, following a change announced in the 2022 federal budget. Before that date, whether tax applied depended on the assignor's original intent when signing the purchase agreement — a fact-specific and often disputed question. The new rule removed the ambiguity: assignment sales on or after that date are simply taxable.

The assignor is generally the one responsible for collecting and remitting the GST/HST on the assignment; if the assignor is a non-resident of Canada, that responsibility can shift to the assignee instead, who has to self-assess the tax. One practical detail worth flagging early in a file: GST/HST doesn't apply to the portion of the assignment price that simply reimburses the assignor's original deposit, provided the assignment agreement states that in writing — only the amount above the deposit is taxable. Get that documentation wrong, and the tax applies to the whole amount instead.

This is where assignment files diverge most from a standard purchase, and where lenders genuinely disagree with each other. Some lenders will only finance against the original contract price with the builder — treating the premium the assignee pays the assignor as money the assignee has to bring separately, outside the mortgage. Other lenders will finance against the full, marked-up assignment price, provided the value is substantiated.

Where a deal is financed against the current, marked-up value, lenders typically want a full appraisal to confirm the property actually supports that number — the assignment price alone isn't treated as proof of value the way a standard resale purchase price often is.

• →The original purchase and sale agreement between the builder and the assignor, showing the original price and terms.
• →The assignment agreement itself, signed by the builder, the assignor, and the assignee, confirming the builder's consent.
• →Where the deal is priced at current value, a separate side agreement between the assignor and assignee covering the marked-up price — a document the builder generally won't sign, since it's the assignor, not the builder, profiting from it.
• →A full appraisal, where the file is being financed against current value rather than the original price.

Missing any one of these tends to stall a file rather than kill it outright — but stalling on an assignment deal is expensive, since these purchases often carry tighter closing timelines than a standard resale.

The core discomfort is valuation risk on a property that doesn't exist yet in finished form, layered with a price built from a private negotiation between two parties rather than an open-market resale transaction. Where the assignment price runs well above the original contract price, that discomfort grows — the lender is being asked to lend against a number with no comparable sales history behind it, on a building that may still be months from completion.

Qualification itself doesn't typically change — the assignee still needs to meet the same income, credit, and down payment standards as any other borrower. What changes is which lenders will even look at the file, and how much of the assignment premium they're willing to lend against.

Confirm the builder's consent and the pricing basis — original price or current value — before shopping the file to lenders, not after. That single fact determines which lenders are even worth approaching, and knowing it upfront saves the client from a round of declines that were predictable from the assignment agreement alone.

Flag the GST/HST treatment in writing early as well, since it changes the assignor's net proceeds and, in some structures, the cash the assignee needs to bring to the table. A file that surfaces the tax question at commitment stage, rather than at the lawyer's desk on closing day, is the difference between a smooth assignment closing and a scramble.