Selling
How to Sell a Pre-Construction Assignment in Ontario
5 min readPublished
Quick answer
To sell a pre-construction home before it closes, you assign your agreement with the builder to a new buyer. First check your agreement's assignment clause and the builder's consent terms and fee. Then price the assignment against today's market, find a buyer, sign an assignment agreement, and let both lawyers handle the builder's consent, the deposit reimbursement and the tax.
Key facts: selling a pre-construction assignment in Ontario
| What you sell | Your rights and obligations under the agreement with the builder |
|---|---|
| First step | Read the assignment clause: consent, fee, timing and advertising limits |
| What the buyer pays you | Your deposits back, plus any agreed profit (or less if the market has fallen) |
| HST | Assignments of new homes are taxable for GST/HST; the deposit reimbursement can be excluded if the agreement sets it out |
| Income tax | Gains on a right to acquire a home held under 365 days are business income |
| Who closes with the builder | The buyer (the assignee) |
1. Read your assignment clause
Whether you can assign, and on what terms, is set by the agreement of purchase and sale you signed with the builder. Find the assignment clause (it may be in a schedule) and note four things: whether the builder's written consent is needed, the fee the builder charges to consent, any period when assignments are not allowed (for example before a set share of units is sold, or close to closing), and any limits on advertising, such as a ban on listing the unit on MLS®.
If the agreement does not allow assignment at all, ask the builder anyway: some will consent on terms. Get any consent in writing.
2. Work out your numbers
Speak to an accountant before you set a price, because the tax can change what you actually keep.
- Deposits you have paid, which the buyer normally reimburses at signing
- The builder's assignment fee and legal fees for both the builder's review and your own lawyer
- Brokerage commission, if you use a brokerage, plus HST on it
- HST on the assignment: since May 7, 2022, assignments of new homes are taxable, with the part that reimburses your deposit excludable when the assignment agreement states it
- Income tax: a gain on a right to acquire housing held for less than 365 consecutive days is taxed as business income under the federal flipping rule, unless a listed life event applies; longer holds can still be business income depending on the facts
- Any HST rebate you assigned to the builder, and how the assignment affects it
3. Price the assignment
Buyers compare an assignment with two alternatives: a similar resale unit in a finished building, and new units the builder is still selling. Your price has to make sense against both. Look at recent resale prices of similar units nearby, the builder's current price list, and other assignments in the same project.
Timing matters. The closer the project is to occupancy, the more a buyer can see and the sooner they can move in, but the less time you have to find one before you would have to close yourself. If today's market is below your purchase price, an assignment can still limit a loss compared with failing to close.
4. Market it within the builder's rules
Follow any advertising limits in your agreement. Where MLS® is not allowed, brokerages can still market assignments to their buyers and on their own sites. On Summitly, you can list an assignment for our buyers and agents to see, with the details a buyer needs: the unit, the original price, the deposits paid, the builder's fee and the expected occupancy.
Prepare the documents a buyer's lawyer will ask for: your agreement and all amendments, the disclosure statement (for a condo), the deposit receipts, the floor plan, any upgrade or extras orders, and the builder's consent terms.
5. Sign the assignment agreement
- Use a written assignment agreement reviewed by your lawyer
- State the price, the deposit reimbursement amount separately, and who pays the builder's fee
- Make it conditional on the builder's consent if consent is required
- Set a timeline that works with the builder's consent process and the occupancy date
- Remember that the buyer's cooling-off rights under the original agreement have usually ended, so expect them to review carefully first
Why assignments stall, and how to avoid it
- Starting too late: finding a buyer, the lawyers' work and the builder's consent can take weeks
- Pricing above what resale and the builder's own remaining units offer
- Missing documents, such as amendments or upgrade orders, that the buyer's lawyer needs
- Unclear tax treatment that makes the buyer or seller hesitate at the last minute
- A buyer who cannot reimburse the deposits in cash or qualify for a mortgage at closing
6. Builder consent, closing and afterwards
Your lawyer sends the signed assignment to the builder for consent. Once the builder consents, the buyer takes your place and closes with the builder on the final closing date. Unless the builder releases you, check with your lawyer whether you stay responsible if the buyer fails to close; many agreements keep the original buyer liable.
After the sale, report the income correctly on your tax return, and keep every document. If you prefer not to sell, or cannot find a buyer in time, see the other options for a closing you cannot complete.
This guide is general information, not legal or tax advice. Rules change and every agreement is different, so have a real estate lawyer review your agreement and speak to an accountant about tax before you sign.
Key takeaways: selling a pre-construction assignment in Ontario
- Your agreement's assignment clause decides whether and how you can sell.
- Assignments of new homes are taxable for HST; keep the deposit reimbursement separate in the agreement.
- Gains on an assignment held under 365 days are business income under the federal flipping rule.
- Price against resale and the builder's current prices, and leave time for consent.
- Unless the builder releases you, you may stay liable if the buyer does not close.
Email me this guide
The quick answer, the key takeaways and the step-by-step checklist in your inbox, with a link back here.
Selling a pre-construction assignment in Ontario: frequently asked questions
Can I sell my pre-construction condo before closing?
Usually, by assignment, if your agreement allows it and the builder consents. Read the assignment clause for the fee, timing and advertising limits, and have your lawyer confirm the terms.
Do I pay tax on a pre-construction assignment profit?
Very likely. The assignment is taxable for GST/HST (the deposit reimbursement can be excluded when the agreement states it), and the profit is taxable income. If you held the right for less than 365 days, the federal flipping rule treats the gain as business income unless a listed life event applies. Speak to an accountant.
What documents do I need to sell an assignment?
Your agreement of purchase and sale with every amendment, the disclosure statement for a condo, your deposit receipts, the floor plan, any upgrade or extras orders, and the builder's written consent terms. Your lawyer will prepare the assignment agreement.
Can I list my assignment on MLS?
Only if your agreement allows it. Many builder agreements restrict MLS® advertising of assignments. Brokerages can still market them to their own buyers where the agreement permits.
What does the builder charge for an assignment?
It depends on the agreement. Builders typically set an assignment fee and may charge legal fees for reviewing the assignment. The amount is in your agreement or set by the builder when you ask for consent.
When should I sell my pre-construction assignment?
There is no single right time. Earlier gives you more time to find a buyer and get consent; closer to occupancy lets buyers see the finished building but leaves less room if the sale falls through. Check any period in your agreement when assignments are not allowed, and start well before closing.
Am I released from the contract once I assign it?
Not always. Many agreements keep the original buyer liable if the assignee fails to close. Ask your lawyer whether the builder's consent releases you.
Sources
- GST/HST Info Sheet GI-120: Assignment of a purchase and sale agreement for a new house or condominium unit — Canada Revenue Agency
- Principal residence and other real estate (residential property flipping rule) — Canada Revenue Agency
- How does deposit protection work on new homes? — Tarion
- Ontario Builder Directory — Home Construction Regulatory Authority (HCRA)
Published by Summitly, the website of Coldwell Banker Summit Realty, Brokerage, registered with the Real Estate Council of Ontario (RECO); an independently owned and operated Coldwell Banker franchise. Broker of Record: Waqar Afzal. Questions or corrections: our contact form. How we write and check these pages: editorial policy.
Cite this guide
Summitly Editorial. (2026, September 28). How to Sell a Pre-Construction Assignment in Ontario. Summitly (Coldwell Banker Summit Realty, Brokerage). https://www.summitly.ca/guides/how-to-sell-pre-construction-assignment-ontario
Guide URLs never change. Section links are stable too.
Have a question about your own sale? Ask Zara
Run the numbers
