Assignments Explained: Selling Your Presale Before Completion
Selling your presale before the building finishes is possible, but it comes with developer consent, mandatory CSAIR reporting, fees, and tax on your profit. Here is how assignments actually work in BC.
You signed a presale contract two years ago, the building is close to finishing, and your plans have changed. Or the unit is worth more than you paid and you want to realize the gain. In both cases the tool is the same: an assignment. It lets you sell your contract to a new buyer before completion, and in BC it comes with rules that catch a lot of people off guard.
Here is a plain-English look at how assignments work, what they cost, and where the tax traps are.
What an assignment actually is
An assignment is the sale of your contract, not the finished home. You (the assignor) transfer your rights and obligations under the Contract of Purchase and Sale to a new buyer (the assignee). They step into your position, complete the purchase with the developer, and take title when the building registers. You never take title yourself.
Because you are selling a contract rather than a property, an assignment is a different transaction from a normal resale, with its own paperwork, approvals, and tax treatment.
You usually need the developer’s consent
Most presale contracts in BC do not give you a free hand to assign. The developer’s addendum sets the terms, and they vary widely:
- Consent required. Many contracts require the developer’s written approval before you can assign, and the developer can withhold it or attach conditions.
- Assignment fees. Developers commonly charge an assignment fee, often a percentage of the purchase price or a flat amount that can run into the thousands.
- Timing restrictions. Some contracts prohibit assignment until a certain construction milestone, or restrict how you can market it.
Read your assignment clause before you count on selling this way. If the contract makes assignment difficult or expensive, that changes the math on buying in the first place.
CSAIR reporting is mandatory
BC requires assignments of presale condo and strata contracts to be reported to the Condo and Strata Assignment Integrity Register (CSAIR). The filing collects the identities of the parties and the amounts involved, and the information is shared with tax authorities.
This is not optional, and it is the main reason quietly flipping a presale is far harder than it used to be. Assume your assignment will be visible to the CRA.
Tax on your profit
If you assign for more than you paid, the difference is generally taxable, and how it is taxed depends on your situation:
- Income versus capital gain. If the CRA views your purchase as made to resell for profit, the gain can be taxed as business income (fully taxable) rather than a capital gain (half taxable). Your intent and your pattern of buying both matter.
- GST on the assignment. GST can apply to an assignment, including on the portion that represents your profit, particularly where the original intent was to flip rather than to live in the home. The rules are technical.
- Your deposit is part of the deal. The price an assignee pays usually reimburses the deposits you have paid plus your profit, which affects how the numbers and the tax are calculated.
Get an accountant involved early. The tax treatment can move the after-tax result substantially, and it is far cheaper to plan for than to fix later.
Before you assume you can assign for a profit, confirm three things: that your contract allows it, what the developer will charge, and how the gain will be taxed. Any one of them can change the decision.
Is assigning right for you?
Assignments make sense when your circumstances change before completion, or when you want to realize a gain without carrying a mortgage. They are harder when the contract restricts them, when the market has softened and assignees expect a discount for taking on completion risk, or when the tax cost erodes the profit. Like the rest of presale, it rewards buyers who understand the terms they signed.
This is part of our Complete Guide to Buying a Presale in BC. If you are weighing an assignment, or want your contract’s assignment terms reviewed before you sign, I help Greater Vancouver presale buyers read the fine print in plain language, at no cost to you. Book a consultation.
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This article is general information, not legal or tax advice. Assignment rights, fees, and tax treatment depend on your specific contract and circumstances. Confirm with a BC real estate lawyer and an accountant before assigning.
