Buying a Presale in BC: Rescission, Deposits and Taxes

How presales work in BC

BC uses the word presale for what Ontario calls pre-construction. You sign a contract with the developer for a unit in a project that is not built yet, pay deposits, and complete the purchase when the building is finished. REDMA sets the rules for how developers market and sell these units, and the BC Financial Services Authority (BCFSA) oversees them.

Before a developer can market or sell units, it must file a disclosure statement and give it to buyers. The disclosure statement describes the project: the developer, the number of units, the proposed completion, the permitted uses, the deposit terms, and much more. If a material change happens, the developer must file an amendment.

• BC presale condos and townhomes →

The 7-day rescission period

Under section 21 of REDMA, you can rescind (cancel) a presale contract by written notice to the developer or its brokerage within 7 days after the later of the date you signed and the date you received the disclosure statement. You do not need a reason, and your deposit is returned. If you were entitled to a disclosure statement and never got one, you may be able to rescind later; ask a lawyer.

Deliver the notice the way REDMA and the contract allow, keep proof of delivery, and do it well inside the deadline. BC also has a separate 3-business-day rescission period for many resale home purchases; presales are covered by REDMA instead.

Deposits and how they are protected

Under REDMA, presale deposits are held in trust by a brokerage or a lawyer or notary by default. A developer can use deposits during construction only if it has approved deposit protection insurance, and the disclosure statement will say which applies. Read the deposit section of the disclosure statement and the contract, and confirm who holds your money.

Each developer sets its own deposit schedule. Read the schedule in your contract and plan for the rest of the down payment and closing costs at completion.

Assignments and the BC home flipping tax

Many BC presale contracts restrict assignment or require the developer's consent and a fee. Developers must report presale assignments to the Condo and Strata Assignment Integrity Register, which the province uses to make sure tax is paid.

Since January 1, 2025, the BC home flipping tax applies to profit from selling a home, including a presale contract, held for less than 730 days. The primary residence deduction is not available on an assignment of a presale contract. The federal flipping rule can also treat a gain on a right to acquire a home held under 365 days as business income.

New home warranty in BC

New homes in BC must have home warranty insurance, commonly called 2-5-10 coverage: two years on materials, labour and systems, five years on the building envelope, and ten years on the structure. BC Housing licenses residential builders and administers the program. Ask the developer which warranty provider covers the project.

This guide is general information, not legal or tax advice. Rules change and every agreement is different, so have a BC lawyer or notary review your agreement and speak to an accountant about tax before you sign.

• BC presale condos and townhomes →
• Pre-construction projects across Canada →
• Ontario's 10-day cooling-off period, for comparison →