What is an Assignment Sale?

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There are many ways to approach a real estate transaction . One strategy you may or may not have heard of is an assignment sale. While assignment sales have increased in popularity in recent years, particularly in the realm of pre-construction properties, many buyers and sellers may still be unfamiliar with the term. In this guide, we hope to arm you with the knowledge to not only understand what an assignment sale entails, but also to skillfully navigate the world of assignment sales in Ontario—regardless of whether you’re a buyer or a seller.

What are Assignment Sales?

An assignment sale refers to the transfer of the rights and obligations of a property purchase contract from the original buyer (assignor) to a new buyer (assignee) before the completion of the property's construction, or before the final closing date. In simpler terms, it's when the purchaser of a property sells their rights to purchase that property to someone else before they take possession.

How Do Assignment Sales Work?

In a typical assignment sale scenario, the assignor of a pre-construction property decides to sell their interest in the property before the closing date. They often do this when they believe they can make a profit or when they're unable to complete the purchase themselves. The assignor finds a new buyer (assignee) who agrees to take over the purchase contract, usually at a price higher than the original purchase price. The assignee pays the assignor the price difference, and the assignor is relieved of their obligation to purchase the property. The assignee then assumes the original terms of the purchase contract and closes the deal with the developer when construction is complete.

Pros and Cons of Assignment Sales


  • Profit Potential : For the original buyer, an assignment sale can be a lucrative opportunity to make a profit if the market value of the property has increased since they signed the contract.
  • Flexible Exit Strategy: Assignment sales provide flexibility for buyers who may have changed their plans or financial circumstances since signing the purchase contract. It allows them to exit the deal without defaulting on the contract.
  • Access to Pre-Construction Properties: For the assignee, purchasing through an assignment sale can offer access to desirable pre-construction properties that may be sold out or have limited availability in the primary market.


  • Developer Approval: Assignment sales are subject to the developer's approval, and not all developers permit them. Even if allowed, developers may charge administrative fees or impose conditions on the assignment process.
  • Market Risk: Both assignors and assignees are exposed to market fluctuations. If the market value of the property decreases between the original purchase and the assignment sale, the assignor may incur a loss, while the assignee may overpay for the property.
  • Complexity and Legal Risks: Assignment sales involve additional legal and administrative processes compared to traditional real estate transactions , increasing the risk of misunderstandings, disputes, or legal complications.


Assignment sales offer a unique opportunity for buyers and sellers to navigate the real estate market, particularly in the context of pre-construction properties. While assignment sales often provide benefits like increased profit potential and flexibility, there are also a number of risks and complexities that require careful consideration. Whether you're considering selling your rights to a property or looking to purchase through an assignment sale, understanding the process and its implications is essential for making informed decisions in the real estate market. To learn more about your options as a buyer, you may want to consult a Clover Mortgage broker. We can provide tailored advice to help you meet your housing goals. Contact us to schedule your free consultation today!


Is it Good to Buy an Assignment Sale?

For many buyers, purchasing through an assignment sale can serve as a unique opportunity to access desirable properties that may otherwise be unavailable in the primary market. Buying an assignment sale may also provide profit potential if the property’s market value has increased since the original purchase. However, it is equally important to weigh the risks of an assignment sale. Buyers can mitigate these by conducting thorough due diligence, reviewing the terms of the assignment agreement, assessing market trends, and considering potential risks such as developer approval, market fluctuations, and legal complexities. While assignment sales can offer flexibility and potential benefits, they also come with inherent uncertainties and may not be suitable for every buyer's situation. Consulting with real estate professionals and conducting careful analysis can help buyers make informed decisions about whether buying an assignment sale aligns with their objectives and risk tolerance.

Who Pays HST on Assignment Sales?

In Canada, the payment of Harmonized Sales Tax (HST) on assignment sales depends on various factors, including the type of property, the status of the buyer, and the specific circumstances of the transaction. Generally, if the original purchaser (assignor) is considered a builder or engaged in the business of selling real estate, they may be required to charge HST on the assignment sale price.

If the original purchaser is not a builder or not involved in the business of selling real estate, HST may not apply to the assignment sale. However, the assignee (new buyer) may still be responsible for paying HST on the purchase price upon completion of the transaction, depending on the type of property and whether the purchase is for personal use or investment purposes.

How Do You Price an Assignment Sale?

Pricing an assignment sale involves a combination of market analysis, understanding the original purchase contract terms, and considering various factors such as current market conditions, property location, and unique features of the property. One common approach is to assess the difference between the original purchase price and the current market value of similar properties in the area. Factors such as the stage of construction, estimated completion date, and any upgrades or incentives offered by the developer can also influence the price. Additionally, sellers may consider factors such as demand for similar properties, prevailing interest rates, and overall economic conditions. It's crucial for sellers to conduct thorough research and possibly seek guidance from real estate professionals to determine a fair and competitive price that reflects the property's value and market dynamics while also considering their own financial objectives and timelines. Similarly, buyers should conduct their due diligence to assess whether the assigned price aligns with their budget, investment goals, and the property's potential value.

Steven Tulman
Written By Steven Tulman
“Making the process of getting a mortgage an easy and enjoyable experience for every Clover Mortgage client!”