Toronto Condo Assignment Sales Explained

Thinking about buying or selling a pre-construction condo assignment near Toronto’s waterfront? You’re not alone. Assignments can unlock value or solve timing issues, but they come with unique contracts, taxes, and builder rules that are easy to miss. In this guide, you’ll learn how assignment sales work, what timelines and deposits look like, how builder consent and fees factor in, and what to do about HST and risk. By the end, you’ll have a clear checklist to move forward with confidence. Let’s dive in.

What an assignment sale is

An assignment sale is the transfer of your contractual rights under a pre-construction Agreement of Purchase and Sale to a new buyer before the condo is registered and title transfers. You are assigning your beneficial interest in the contract, not selling the real estate itself. The assignee steps into your position with the builder and completes the purchase at final closing.

Assignments happen between the initial presale and registration. The typical lifecycle is sales and marketing, deposit installments, construction, then occupancy and registration. An assignment occurs in the middle, before title transfers at registration.

Common reasons to assign include taking profit before closing, changes in financing or lifestyle, or an investor strategy to capture appreciation during construction. If you are buying an assignment, you may secure a unit and timeline that fits better than resale or waiting for registration.

Timelines and deposits

Pre-construction timelines vary, but a common pattern for Toronto waterfront projects is:

• You sign the builder contract and begin a staged deposit schedule.
• Deposits are typically paid over 6 to 18 months while construction continues.
• Construction can run 1 to 4 or more years.
• Occupancy and registration occur last, and legal title transfers at final closing.

Most assignments happen after the deposit schedule is complete, though some builders allow earlier assignments. Builders set these conditions in the purchase contract and assignment policy, so check the fine print early.

Deposit structures to expect

• Total deposits commonly fall between about 15% and 25% of the purchase price. The exact schedule is set by the builder.
• Many assignments transfer the benefit of deposit receipts to the assignee. Some builders require the assignee to top up deposits or reissue cheques.
• Confirm whether the builder holds deposits in trust and whether the assignment relieves the original buyer of future deposit obligations.

Timing risks to plan for

• Builder consent can add weeks to your timeline.
• Lenders may need assignment documentation for conditional approval, which can extend processing time.
• Between signing an assignment and final closing, market prices, builder adjustments, or financing terms can change. Build in a buffer for timing and rate shifts.

Builder consent and fees

Most builder agreements require written consent to assign. Consent is an administrative approval that typically comes with conditions and fees, and you should not rely on it as legal advice.

What builders often require

• An assignment application and supporting documents.
• An assignment fee, which can be a fixed amount or a percentage of the purchase price. Some projects charge around 1%, but amounts vary by development.
• The assignee must meet purchaser qualifications similar to an original buyer, which may include identity verification and credit review.
• Assignment may be limited to certain milestones or timeframes set by the builder.
• Builders can require proof of cleared deposits, indemnities, and compliance with the original contract.

The paperwork you will see

• An assignment agreement between the assignor and the assignee that sets the price or premium and clarifies who pays what.
• The builder’s consent document and any amendments.
• Lawyer-to-lawyer directions and closing documents to finalize the transfer.

Practical tip: Ask for the builder’s assignment policy and fee schedule as soon as you consider an assignment. Knowing the rules upfront helps you price correctly and avoid surprises.

HST and taxes at a glance

New residential condos in Ontario are generally subject to HST. The combined HST rate in Ontario is 13%. Owner-occupiers may qualify for a new housing rebate if they meet the requirements outlined by the Canada Revenue Agency. Review the CRA’s guidance on GST/HST and new housing rebates for current rules and forms.

• Learn about GST/HST and new housing rebates on the CRA site: CRA GST/HST resources
• Review Ontario tax and HST information: Ontario Ministry of Finance

How HST can affect an assignment

• The premium paid on an assignment may be subject to HST depending on the nature of the transaction and the assignor’s status. This is fact-specific and can differ by situation.
• At final closing, the builder typically treats the purchase of the new condo as HST applicable, and rebates may apply based on occupancy and use.
• Lenders will want clarity on tax treatment before approving your mortgage.

Because outcomes vary, involve a tax professional early. Your assignment agreement should clearly state who is responsible for HST on the premium, how HST will be handled at final closing, and which rebates, if any, are expected.

Risks to weigh

Assignments can be smart, but they require discipline. Keep these risks in view:

• Market risk: comparable prices can move during construction, which may change your profit or future financing.
• Builder risk: construction delays, scope changes, or rare project cancellations can affect timing and value.
• Consent risk: builders can delay or condition consent, which changes your deal economics.
• Financing risk: some lenders are cautious about unregistered properties and may require larger down payments.
• Tax risk: unexpected HST or income tax treatment can reduce net proceeds.
• Deposit risk: unclear deposit transfers can leave either party on the hook if not papered correctly.
• Legal risk: poorly drafted agreements may create double obligations or missed conditions.

If you want market context for Toronto condos as you weigh timing, review Toronto Regional Real Estate Board market reports for broader trends.

Due diligence checklist

A clean file reduces risk and helps you close on time. Use this checklist before you commit to an assignment.

Core documents to request

• Original Agreement of Purchase and Sale, all schedules, and any amendments.
• Builder assignment policy and consent forms.
• Deposit receipts and a complete deposit ledger, including dates and trust status.
• Details on upgrades, parking, locker allocations, and any price adjustments.
• Builder disclosure package and any draft condo corporation documents, if available.
• Estimated occupancy and registration timelines and any delay notices.
• Occupancy fees and development levy estimates.
• Warranty coverage information. For background on Ontario new home warranties, visit Tarion Warranty Corporation.

Legal and financial checks

• Have a real estate lawyer review the assignment agreement and builder consent language.
• Consult a tax accountant on income versus capital treatment and any HST exposure.
• Confirm lender policy and obtain a conditional mortgage approval tailored to assignments.
• Verify estimated maintenance fees, development charges, and all closing adjustments.

Cost allocation and logistics

• Decide in writing who pays the assignment fee, legal fees, HST on the premium if applicable, and closing adjustments.
• Confirm any corporate approvals if buying or selling through a corporation.
• Prepare identity verification and anti-money-laundering documents.

When to walk away

• The builder refuses consent or imposes conditions that change your economics.
• HST or tax exposure remains unclear and materially affects your outcome.
• Financing cannot be secured on acceptable terms.
• Deposit or legal obligations are ambiguous and cannot be resolved by counsel.

Decision paths for sellers and buyers

Whether you are assigning your contract or buying one, work through these steps before signing.

If you are the assignor (seller)

1. Calculate net proceeds. Start with the proposed premium and subtract the assignment fee, legal and accounting costs, potential taxes, and any outstanding builder obligations.
2. Confirm builder consent terms, the required documents, and the expected timeline.
3. Verify the assignee’s financing strength and ensure your agreement includes protections for deposit handling and indemnities.
4. Engage your lawyer to prepare or review the assignment and consent documents, and confirm tax treatment with an accountant.

If you are the assignee (buyer)

1. Confirm exactly what you are acquiring, including price, upgrades, parking, locker, and any incentives that carry through to registration.
2. Ensure builder consent is obtained and properly recorded so the builder recognizes you at closing.
3. Secure conditional mortgage approval that covers the assignment structure and closing timelines.
4. Review deposit history, builder warranties, estimated occupancy costs, and involve your lawyer and tax advisor.

Waterfront realities to keep in mind

Demand for well-located waterfront condos can be strong, and timelines can shift during construction. Assignment opportunities often appear once deposit schedules finish, but each project sets its own rules. Align your decision with your timeline, risk tolerance, and tax position, and price with a clear view of builder fees and closing costs.

How a boutique team helps

Assignments move fast and hinge on details. A high-performing, Toronto-focused team can help you source opportunities, position your assignment for buyers, coordinate with builders, and keep documents organized from consent through closing. With developer relationships and a concierge approach to transaction management, you get the structure and communication needed to protect your outcome and timeline.

Ready to compare an assignment versus a resale purchase on the Toronto waterfront? Reach out to The Starke Group for a clear plan tailored to your goals.

FAQs

What is a condo assignment sale in Toronto?

• It is the transfer of a buyer’s contractual rights in a pre-construction condo to a new buyer before the building registers and title transfers.

How much are builder assignment fees in Toronto?

• Fees vary by project and builder policy. Some charge around 1% of the purchase price, but amount and structure differ and are set in the contract.

Do I pay HST on an assignment premium?

• It depends on the nature of the transaction and the assignor’s status. HST can apply to the premium in some cases, so get advice and review CRA GST/HST guidance.

Is HST due on the new condo itself at closing?

• New residential condos are generally HST applicable at final closing, and rebates may apply for eligible owner-occupiers per CRA new housing rules.

Can I assign before finishing the deposit schedule?

• Sometimes. Many assignments occur after deposits are completed, but some builders allow earlier assignments depending on contract terms and consent policy.

How long does builder consent take for an assignment?

• Consent can add weeks. Timelines depend on the builder’s process, documentation quality, and whether the assignee meets qualifications.

What happens to deposits in a Toronto assignment?

• Deposit receipts often transfer to the assignee, but procedures vary. Confirm the deposit ledger, trust status, and any top-up requirements in writing.

Will lenders finance an assigned pre-construction condo?

• Many lenders do, but policies differ. Some require larger down payments and detailed assignment documentation, so secure conditional approval early.