An assignment sale transfers the contract, not the home: the original buyer (the assignor) sells their agreement of purchase and sale to a new buyer (the assignee), who steps in and closes with the builder. It is the only exit from a pre-construction deal before final closing that does not involve default — and every step has a gate. This is the general mechanics; assignment clauses, tax treatment and reporting rules are fact-specific, and both sides normally work through their own lawyers.
Step 1: The consent gate — check the clause before anything else
Most builder agreements restrict assignment: it may be prohibited outright, allowed only with the builder’s written consent, allowed after a date or a deposit milestone, or allowed on payment of a fee. The catalogue sees the published end of this: 19 of the 168 records mention assignment in their incentive or deposit records — TEK Tower in Kitchener lists “$0 assignment (+$1,500 legal fee)” and Moffat Creek in Cambridge lists “Free assignments (a $1,500 legal administration fee applies).” Read those precisely: “free” describes the builder’s assignment fee, and a legal or administration charge still applies in both. Where a record says nothing, nothing is promised — the agreement the original buyer signed is the only document that answers.
Step 2: Price the contract, not the home
An assignment price has moving parts the parties itemise: the deposits the assignor has already paid (reimbursed to the assignor), plus any profit (or minus any loss) on the original purchase price, which the assignee pays for the right to take over. The assignee then owes the builder the remaining deposits on the original schedule and the balance on final closing. The assignee’s own financing and the builder’s requirements (some builders require proof of mortgage approval from the assignee) are settled before the assignment is firm — an assignment that collapses at final closing leaves the original assignor exposed in most agreement structures, which is why the diligence happens here and not later.
Step 3: The tax change that rewired assignments — May 7, 2022
Before May 7, 2022, some assignment sales of new housing escaped GST/HST depending on the assignor’s circumstances. Since that date, all assignment sales of new or substantially renovated housing are taxable supplies for GST/HST — in Ontario, 13% — generally on the assignment price excluding the portion that reimburses the original deposits, and only where the assignment agreement states that deposit portion separately and in writing. The CRA’s GST/HST Notice 323 and its GI-120 guide (linked below) set out the mechanics: in most cases the assignor collects and remits the tax; where the assignor is a non-resident, the assignee self-assesses instead. On top of the sales tax, the profit on an assignment can be taxed as business income, and anti-flipping rules can deny principal-residence treatment on quick resales — the reason “the assignment made money” is the beginning of a tax conversation, not the end of one.
Step 4: Paper it with the builder
A completed assignment is documented with the builder: the assignment agreement, the builder’s consent where required, the fee paid, and the assignee’s information replacing (or, in many agreements, supplementing — assignors often remain liable) the original buyer on the file. The builder’s sales office confirms the deposit ledger transfers cleanly. Until that paper exists, what has been sold is a promise about a contract, not the contract itself.
Step 5: Final closing runs as if nothing happened
The assignee closes with the builder on the original terms: balance due, HST on the new home with whatever rebate route applies to the assignee’s own use, land transfer tax, and adjustments. The assignment layer is finished by then — two transactions (contract, then home) where a resale would have had one, with the tax and consent machinery of both. Assignments are neither a loophole nor a trap; they are a second, smaller transaction wrapped around the first, and they work when each gate — consent, financing, tax, builder paper — is cleared in order.