Assignment Sales Explained: Buying a Pre-Construction Contract (2026)
An assignment sells the purchase contract before the home is built: you reimburse the assignor’s deposits plus profit, then close with the builder.
An assignment is the sale of a purchase contract before the property is built or registered. The original buyer (the assignor) transfers their agreement with the builder to you (the assignee) for a price; you reimburse the deposits they have paid plus any profit, and then you close with the builder on the original terms. On a $650,000 contract with $97,500 of deposits, assigned at $720,000, you pay the assignor $167,500 (deposits plus $70,000 profit) and owe the builder the remaining $552,500 at final closing. Financing, HST and the builder's consent all work differently from a resale.
Figures come from the CostToClose guided buying flow.
How the money flows
| Step | Who pays whom | Amount |
|---|---|---|
| Original contract | Assignor → builder, over time | $650,000 (deposits $97,500 paid) |
| Assignment agreement | Assignee → assignor, on assignment closing | $97,500 deposits + $70,000 profit = $167,500 |
| Builder's assignment fee | Usually assignor, sometimes split | $1,500 to $7,500 |
| Occupancy fees (if before registration) | Assignee → builder, monthly | See occupancy fees |
| Final closing | Assignee → builder | $552,500 balance + HST treatment + adjustments |
| Land transfer tax | Assignee, at final closing | On $650,000 in most provinces (Ontario); some jurisdictions tax the $720,000 |
Run through the CostToClose calculator, 14 September 2026.
What is different from a resale
- Builder consent. Most agreements prohibit assignment without written consent and charge a fee. Some prohibit marketing the assignment on the MLS®.
- Two closings. The assignment closes when you pay the assignor; the property closes with the builder months later. Your lawyer handles both.
- Financing. The $167,500 to the assignor is usually cash. Most lenders will not advance mortgage funds until final closing with the builder, and some will not finance assignments at all. Get a lender that does before you sign.
- HST. Since May 2022 all assignment sales of new residential property are HST-taxable on the assignor's profit; the assignor charges you HST on the profit portion, and you may or may not recover it. Separately, the new-housing rebates at final closing depend on your intended use, not the assignor's. See The HST trap in assignment sales.
- Adjustments at final closing. Development charges, utility connections, Tarion enrolment, and the builder's other pass-throughs are in the original agreement. Read the whole thing; the assignor's lawyer has it.
Worked example from the calculator
Assignee buying the contract above, first-time buyer, intending to occupy, 10% down at final closing:
| Item | Amount |
|---|---|
| Paid to assignor at assignment | $167,500 (cash) |
| HST on assignor's profit (13% of $70,000) | $9,100, paid to assignor |
| Builder's assignment fee (agreed: split) | $2,500 |
| At final closing: balance to builder | $552,500 |
| Mortgage at final closing (90% of $650,000) | $585,000, of which $32,500 refunds part of the cash already paid |
| Ontario land transfer tax on $650,000 | $9,475 − $4,000 refund = $5,475 |
| Builder adjustments (estimate) | $8,000 to $15,000 |
| Cash needed before mortgage funds | ≈ $179,100 at assignment; mortgage returns $32,500 later |
The buyer carries $179,100 for the months between the two closings. Reproduce this.
When assignments make sense
For assignees: when the assignment price is below what comparable completed units sell for, and you have the cash. For assignors: when circumstances changed and the penalty for defaulting on the builder (loss of deposits) is worse than selling the contract at a discount.
Frequently asked questions
What is an assignment sale?
The sale of a buyer's contract with a builder to a new buyer before the property is completed. The new buyer takes over the contract and closes with the builder.
Can I get a mortgage for an assignment?
Some lenders finance the final closing with the builder; almost none advance funds for the payment to the assignor, which is usually cash.
Is HST charged on assignment sales?
Yes, on the assignor's profit portion since May 2022. The new-housing rebates at final closing depend on the assignee's intended use.
Who pays the builder's assignment fee?
Whoever the assignment agreement says; commonly the assignor, sometimes split.
Is land transfer tax paid on the assignment price or the original price?
In Ontario, on the amount paid to the builder plus the assignment consideration in most cases — ask your lawyer, because treatment varies by province and by how the agreement is structured.
Sources
- Canada Revenue Agency, GST/HST on assignment sales of new housing (effective 7 May 2022) — checked 14 Sept 2026
- Tarion, assignment of a purchase agreement — checked 14 Sept 2026
- Ontario Ministry of Finance, Land Transfer Tax on assignments — checked 14 Sept 2026
This guide is general information for Canadian home buyers and sellers, checked against the sources listed above on the date shown. It is not legal, tax, or mortgage advice. Rules and rates change; confirm current figures with your lawyer or notary, your lender, or the government office that administers the tax before relying on them.