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An assignment (or assignment sale) happens when the original buyer of a property — typically a pre-construction condo or home — sells their rights and obligations under the purchase agreement to a new buyer before the original closing date, without ever taking title themselves.
The original buyer, or “assignor,” signs an agreement of purchase and sale — often years before a pre-construction building completes — and pays deposits along the way. Before the original closing, the assignor transfers, or “assigns,” their contractual position to a new buyer, the “assignee,” who then completes the purchase directly with the builder and takes title at closing.
Most pre-construction agreements restrict assignment and require the builder’s consent, often for a fee. The assignee has to qualify for their own mortgage under the lending rules and rates in effect at the time of the assignment, not the rules that applied when the original agreement was signed.
In effect, the assignor is selling their deposits plus any price appreciation since signing — or absorbing a loss if values fell. Assignment sales can also carry different GST/HST treatment than a standard resale, which is why both sides typically involve a lawyer and accountant familiar with pre-construction transactions.
Builder consent is usually required: most new-construction purchase agreements restrict assignment and require the builder’s written consent, often with an assignment fee.
The assignee qualifies under current rules: the new buyer must qualify for their own mortgage, including the minimum qualifying rate in effect at the time, regardless of when the original agreement was signed.
Tax treatment differs from a resale: assignment sales can carry different GST/HST implications than a standard resale closing, so buyers and assignors typically involve a lawyer and accountant familiar with pre-construction transactions.
The assignor never holds title: because the assignor transfers contractual rights rather than the property itself, they never appear on title, and closing happens directly between the builder and the assignee.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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