A condo assignment sale is the sale of a pre-construction purchase contract, not the unit itself. The original buyer, the assignor, sells their right to buy the finished condo to a new buyer, the assignee, before the building registers and before anyone takes legal title. It happens more often in Toronto than most buyers expect, and it works differently from a resale purchase at almost every step: who has to approve it, who pays what, and when the tax bill lands. This guide covers the mechanics in full. For everything else a Toronto purchase or sale involves, see our complete Toronto real estate guide, which touches on assignments briefly as part of the pre-construction buying process.
What a condo assignment sale actually is
When someone buys a pre-construction condo, they sign an agreement of purchase and sale with the builder, not a deed to a finished unit. That unit doesn’t exist yet. Between signing and the building’s final registration, which can take years, the buyer holds a contract, a right to take ownership once the condo is built and registered. An assignment sale transfers that contract, and everything attached to it, to a new buyer before the original buyer ever closes.
The assignee steps into the assignor’s shoes entirely. They inherit the original purchase price, the builder’s payment schedule, any deposits already paid, and the eventual closing itself. What changes hands in an assignment is the contract and, usually, a premium (or a discount) on top of what the assignor already paid in, reflecting how the unit’s value has moved since the original deal was signed.
Why sellers assign instead of closing
The reasons people assign are mostly practical, not speculative. Financing is the biggest one: some assignors can no longer qualify for the mortgage they’ll need at closing, often because the unit’s current appraised value has fallen below the price they agreed to pay years earlier. A lender will only finance against today’s appraisal, not the original contract price, so a buyer facing that gap has to find the difference in cash or find another way out, and assigning is often that way out.
Life circumstances account for a large share of the rest. A job relocation, a marriage, a divorce, a growing family that has outgrown the one-bedroom unit bought years earlier: any of these can make the original purchase no longer make sense by the time the building is ready. Some assignors simply don’t want to carry a mortgage and rent the unit out for a year while waiting for the building to register, and would rather exit the contract cleanly. A real premium on the original price is sometimes part of the picture too, but it’s one motivation among several, not the default explanation for why an assignment listing exists.
What the process requires: consent, fees, and separate lawyers
An assignment can’t happen without the builder’s written consent. Every new-construction purchase agreement in Ontario gives the builder this control, and a buyer who tries to assign without it risks breaching the original contract entirely. Builders review the incoming buyer’s financial qualifications before agreeing, a process that can take several weeks, and they often attach conditions to that consent: a restriction on marketing the unit publicly before approval, a specific timeline for completing the assignment, or both.
Builders also charge for granting consent. The assignment fee is set unilaterally in the builder’s own contract terms, commonly in the range of 1 to 2 percent of the original purchase price, plus HST and sometimes a separate administration charge. It’s non-negotiable. What a specific builder charges on a specific project varies, so the number on any given assignment depends entirely on the contract the assignor originally signed, not a citywide standard.
Once consent is granted, the assignor and assignee need their own lawyers. Ontario’s rules of professional conduct restrict a single lawyer from representing both sides of most residential real estate transactions, precisely because an assignment creates real, opposing interests: who’s responsible for the occupancy fees already accrued, what happens if the deal falls through, how the deposit is treated. Two lawyers from the same firm can act for both parties only with informed consent from everyone involved, and both have to withdraw the moment an actual conflict shows up. Assuming a single lawyer can handle both sides to save money is a common mistake, and it’s the kind of shortcut that tends to surface a dispute later rather than prevent one.
Occupancy fees in an assignment: who pays, and for how long
If a condo has already reached interim occupancy, meaning residents can move in before the building is legally registered, the assignment doesn’t wait for registration to close. The assignee simply takes over the assignor’s occupancy obligations from the date the assignment completes, for whatever remains of the interim occupancy period until final closing.
During interim occupancy, nobody has a mortgage yet, because legal title hasn’t transferred from the builder to anyone. Instead, the occupant pays the builder a monthly occupancy fee that covers three things: interest on the unpaid balance of the purchase price, an estimate of the property taxes the unit will eventually owe, and an estimate of the common expense fees the condo corporation will eventually charge. None of that payment reduces the purchase price or builds any equity. It’s closer to rent than a mortgage payment, except it’s calculated from the contract, not a market rate.
How long interim occupancy runs, and therefore how long an assignee pays these fees before the deal actually closes, depends entirely on when the building registers, which can run from a few months to well over a year depending on construction and municipal registration timelines. An assignee taking on a unit already in interim occupancy should ask exactly how far along that timeline is and what the current monthly fee actually costs before agreeing to a price, since it’s a real ongoing cost with no equity attached, not a rounding error.
Toronto’s assignment market right now
Assignment sale volume in Toronto tends to rise when original buyers face a financing gap at closing, and that’s the pattern documented through 2026, not a recovery from a prior slowdown. TRREB’s own Q1 2026 Condo Market Report showed condo apartment sales down 11.3 percent year over year, with the average price down 9.1 percent to $618,484, the steepest decline of any housing segment that quarter. By August 2026 the year-over-year decline had narrowed but was still real, with the average condo apartment price down 3.8 percent. Prices that low, against contracts signed at 2020-2022 peak pricing, leave a real gap between what some buyers agreed to pay and what a bank will actually lend against the unit’s current value.
That gap is what’s driving assignment listings up, not investor demand. Multiple 2026 market reports describe original buyers facing exactly this shortfall at closing, sometimes listing their contracts at or below what they originally paid rather than finding the difference in cash. It’s a buyer’s market for assignments specifically, in the sense that sellers are often motivated rather than opportunistic, which is worth knowing whether you’re the one assigning or the one considering an assignment purchase. None of this means every assignment is a bargain or every assignor is desperate. It means the current volume has an identifiable financial cause, and it’s worth asking an assignor directly why they’re selling before assuming the answer.
For anyone deciding whether to buy into a finished unit instead of an assignment, our guide to closing costs in Toronto covers what a buyer pays at final closing either way, since an assignee still faces the same closing costs the assignor would have.
Tax implications an assignor should know about
HST applies to the profit on an assignment sale, not the full sale price, and not automatically to the deposit portion. Since May 7, 2022, the Canada Revenue Agency has treated assignment sales of new residential property as taxable, but the assignment agreement can state in writing that part of the price reimburses the deposit the assignor already paid the builder, and HST then applies only to the amount above that. The CRA’s own guidance on assigning a purchase agreement sets out exactly how this is meant to be documented, and getting the paperwork wrong is a real way to end up paying HST on money that should have been exempt.
Rebate eligibility also shifts in an assignment. The federal First-Time Home Buyers’ GST/HST rebate doesn’t apply to an assignment purchase, so an assignee who was counting on that rebate needs to know it isn’t available here. An assignee who plans to rent the unit out instead may be able to claim the New Residential Rental Property rebate once they have a signed year-long lease in place, a separate program with its own conditions.
None of this is a substitute for advice specific to your own numbers. HST treatment and rebate eligibility both depend on exactly how the assignment agreement is worded and what the assignee intends to do with the unit, and an assignor or assignee working through a real transaction should confirm their own position with a real estate lawyer and an accountant before signing anything, not rely on a general guide to get the tax outcome right.
Frequently asked questions
What is a condo assignment sale?
A condo assignment sale is the sale of a pre-construction purchase contract, not a finished unit. The original buyer, called the assignor, transfers their right to eventually take ownership of the condo to a new buyer, the assignee, before the building is registered and before the assignor ever closes on the unit themselves. The assignee takes over the original purchase price, the builder’s remaining payment schedule, and the eventual closing, and usually pays the assignor a premium, or occasionally accepts a discount, reflecting how the unit’s value has moved since the original contract was signed. It requires the builder’s written consent, since the builder is still a party to the underlying agreement even after it changes hands.
Do you need the builder’s permission to assign a condo contract?
Yes. Every standard new-construction purchase agreement in Ontario gives the builder the right to approve or refuse an assignment, and trying to transfer the contract without that written consent risks breaching the agreement entirely. Builders typically review the incoming buyer’s financial qualifications before agreeing, which can take several weeks, and often attach conditions such as restricting public marketing of the unit before approval or setting a deadline for completing the assignment. Builders also charge a non-negotiable assignment fee for granting consent, commonly in the range of 1 to 2 percent of the original purchase price plus HST, though the exact figure is set by each builder’s own contract and varies from project to project.
Who pays the occupancy fee if a condo is assigned during interim occupancy?
The assignee takes over the occupancy fee from the date the assignment completes. If a unit has already reached interim occupancy, meaning someone can live in it before the building legally registers, the person occupying it pays the builder a monthly fee covering interest on the unpaid purchase balance, estimated property taxes, and estimated common expense fees, since no mortgage exists yet without legal title having transferred. None of that payment builds equity or reduces the purchase price. When an assignment happens mid-occupancy, all of the assignor’s remaining obligations under that arrangement, including the monthly fee, pass directly to the assignee starting on the assignment date.
Do you pay HST on a condo assignment sale in Toronto?
HST applies to the profit portion of an assignment sale, not the full contract price. Since a Canada Revenue Agency rule change effective May 7, 2022, assignment sales of new residential property are treated as taxable, but if the assignment agreement states in writing that part of the price reimburses the deposit the assignor already paid the builder, HST applies only to the amount above that deposit, not the whole transaction. For example, a $50,000 deposit reimbursed in full plus a $150,000 total assignment price would mean HST applies only to the $100,000 profit above that deposit, not the full $150,000, provided the paperwork documents the deposit reimbursement correctly. Getting that documentation wrong is a real way to end up paying HST on money that should have been exempt, so this is worth confirming with a lawyer or accountant before signing, not assumed from a general rule of thumb.
Why would someone sell a condo on assignment instead of just closing on it?
The most common reason is financing. Some original buyers can no longer qualify for the mortgage they’ll need at closing, often because the unit’s current appraised value has dropped below the price they agreed to pay when they signed years earlier, and a lender will only finance against today’s value, not the original contract price. Life circumstances make up much of the rest: a job relocation, a marriage or divorce, or a family that has simply outgrown the unit bought years before it was finished. Some assignors also don’t want to carry a mortgage and rent the unit out for a year while a building finishes registering, and prefer to exit the contract cleanly instead. A genuine profit on the original price is sometimes part of an assignor’s reasoning too, but it’s one motivation among several rather than the default explanation, and it’s worth asking an assignor directly why they’re selling rather than assuming.
Whether an assignment purchase makes sense for you comes down to that specific contract, the fees attached to it, and the numbers your own lawyer confirms. Browse current Toronto listings to see what’s available, or explore the rest of our guides for what else buying and selling in Toronto involves.