In short
You step into their contract, including the price, the closing date and the deposit structure.
It can be a way into a new build, but there are extra costs and rules.
How an assignment works
When someone buys a home or condo before it's built, they sign an agreement of purchase and sale with the builder. Before closing, that buyer (the assignor) can sometimes sell their rights under the agreement to a new buyer (the assignee).
The new buyer steps into the original agreement: the builder's price, the closing or occupancy date and the deposit schedule. The assignee typically pays the assignor back for the deposits already paid, plus any profit agreed between them.
The builder has to agree
Most builder agreements limit or ban assignments without the builder's written consent. Many builders charge an administration or assignment fee, and some don't allow assignments to be marketed on the MLS® System before the project is sold out.
Read the assignment clause in the original agreement before doing anything else. If the builder doesn't consent, the deal can't proceed.
Your lender also needs to approve the mortgage based on the builder's price and the assignment terms, so arrange financing before you commit.
HST on assignment sales
Since May 7, 2022, the Canada Revenue Agency treats all assignments of agreements for newly built homes as taxable for GST/HST, regardless of why the original buyer signed. In Ontario, that means 13% HST generally applies to the assignment amount.
The portion that simply reimburses the original deposit can be excluded from the taxable amount, but only if the assignment agreement says so in writing. The assignor is usually responsible for collecting and remitting the tax.
Income tax and the anti-flipping rule
Under the federal residential property flipping rule, in effect for sales on or after January 1, 2023, profit on a home, or on a right to buy one, held for less than 365 consecutive days is generally taxed as business income, not as a capital gain. Assignments are included.
There are limited exceptions for life events such as a death, a new job or a breakdown of a relationship. Assignors and buyers should get advice from a real estate lawyer and an accountant before signing.
Common questions about assignment sale
Is HST charged on an assignment sale in Ontario?
Yes, for assignments made after May 6, 2022, the CRA treats the assignment of an agreement for a new home as taxable, so 13% HST generally applies in Ontario. The amount reimbursing the original deposit can be excluded if the agreement states that in writing.
Does the builder have to approve an assignment?
In most cases, yes, because builder agreements usually require written consent before an assignment. Builders often charge a fee and may set conditions, so check the assignment clause in the original agreement first. Your lawyer can confirm the exact terms.
Is profit from an assignment sale taxable?
Yes, assignment profit is generally taxable. If the right to buy was held for less than 365 days, the federal flipping rule usually treats the gain as business income, fully taxable, unless a listed life-event exception applies. Holding period rules for assignments can be complex, so ask an accountant.
What are the risks of buying an assignment?
The main risk is that you inherit the original agreement exactly as written, including the closing date, builder adjustments and any delays. You also need financing that works at closing, so talk to your lender and lawyer early. Ask about any delays the project has already had.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.