Assignment Sales In Toronto Explained

If you are eyeing a pre-construction condo but keep hearing about “assignment sales,” you are not alone. Assignments can be a smart way to secure a unit in Toronto, yet the process, fees, and tax questions can feel murky. You want clarity before you commit your time and money.

In this guide, you will learn what an assignment sale is, how the process works in Toronto, typical costs and taxes, key risks to watch for, and how to compare opportunities in downtown or west-end Toronto versus South Mississauga. You will also get a simple checklist to move forward with confidence. Let’s dive in.

What is an assignment sale?

An assignment sale is a secondary sale where the original purchaser of a pre-construction unit, called the assignor, transfers their contractual rights and obligations in the Agreement of Purchase and Sale to a new buyer, called the assignee, before closing and registration with the developer.

Before closing, you typically hold an equitable interest rather than legal title. In an assignment, you are buying that equitable interest and taking over the contract, not registered title yet. Most developers require written consent for any assignment, and some projects prohibit or restrict assignments entirely.

Releases are not automatic. Even after the assignment, the assignor may remain liable to the developer unless the builder issues a formal release or novation. Never assume you are off the hook unless it is clearly documented.

How Toronto assignments work

Typical timeline

• You sign a pre-construction APS and pay deposits. Final closing may be 1 to 4 or more years away.
• An assignment can be pursued any time the APS allows it, commonly during pre-construction, after interim occupancy, or before registration.
• Timelines depend on the developer’s consent process, construction progress, and your closing window.

Step-by-step process

1. Align on price and terms. Assignor and assignee negotiate the assignment price and who pays which fees. Bring in agents and lawyers with assignment experience.
2. Lawyer review. The assignee’s lawyer reviews the original APS, condo documents, and the assignment clause. Full disclosure is essential.
3. Apply for developer consent. Submit the consent application, pay the developer’s assignment or admin fee as required, and provide requested documents. Review time can range from several days to a few weeks.
4. Receive consent. The developer may grant consent, sometimes with conditions, or refuse. Assigning without consent is risky and can breach your APS.
5. Sign the assignment agreement. Set out deposits, fee responsibilities, and any conditions such as financing and lawyer review.
6. Close and take title. On final closing, the assignee becomes the purchaser on title and pays closing funds. Any release of the assignor, if available, is confirmed by the developer.

Documents you will see

• Original APS with all schedules and addenda
• Assignment agreement between assignor and assignee
• Developer consent letter and any assignment administration agreement
• Closing documents from lawyers

Timing tips

• Builder processing speed varies. Projects with frequent assignments may be faster; others may take longer.
• Watch the interim occupancy period. Occupancy fees and adjustments can add carrying costs before registration.
• Keep lender timelines in mind. Some lenders need extra lead time for assignment closings.

Costs, taxes, and adjustments

Assignment math is more than the headline price. Build a clear budget before you sign.

• Developer assignment or admin fee. Many builders charge a consent fee, often around 1 percent of the purchase price plus HST. Some use flat fees or higher percentages. Confirm your project’s terms.
• Real estate commission. Brokerage commissions usually apply to assignment listings. Who pays is negotiable and should be clear in your agreement.
• Legal fees. Both sides should use lawyers experienced in assignments and pre-construction closings. Fees vary by complexity.
• Land Transfer Tax. When you take title in Toronto, you generally pay both Ontario’s provincial LTT and the City of Toronto’s municipal LTT based on the purchase price. Whether any LTT applies on the assignment itself depends on how the deal is structured. Confirm with your lawyer.
• GST/HST treatment. HST may apply to the assignment premium or to other parts of the transaction depending on whether it is a supply of new housing and whether any new housing rebate applies. Get advice from an accountant familiar with assignment rules.
• Income tax on profit. If you are the assignor, profit on the assignment may be taxable. The Canada Revenue Agency often treats quick, speculative assignment profits as business income. Tax treatment is fact specific.
• Other possible costs. These may include Tarion or builder transfer fees, adjustments for utilities and common expenses at closing, and any financing-related costs.

Risks and protections

Assignments can be smooth when you manage the risks upfront. Here is what to watch and how to protect yourself.

Assignor risks

• Continuing liability. Without a formal release from the developer, you may remain liable if the assignee defaults.
• Deposit exposure. You could be responsible for deposit shortfalls or damages if things go wrong.
• Tax surprises. Assignment profits can lead to unexpected income tax obligations.

Assignee risks

• Developer consent refusal. If consent is withheld, the assignment cannot proceed under most APS terms.
• Financing risk. Some lenders are cautious about assignments. You need mortgage pre-approval tailored to the assignment and the closing date.
• HST and LTT surprises. Misunderstanding taxes can change your net cost at closing.
• Warranty clarity. Confirm that Tarion warranty coverage will transfer and what coverage remains.

Protective steps

• Work with experienced lawyers and agents who handle assignments regularly.
• Ask the developer in writing about consent terms, admin fees, required documents, and whether a release or novation is possible.
• Use conditions in the assignment agreement, such as subject to developer consent, financing approval, and lawyer review.
• Clarify deposit handling. Specify who pays which fees at closing.
• Get mortgage guidance early. Confirm your lender’s assignment policy and documentation requirements.
• Obtain tax advice on HST, LTT, and income tax treatment.
• Verify Tarion transfer rules and warranty dates.

Toronto vs South Mississauga

When you are weighing assignments, your lifestyle and commute can be as important as price. Here is how downtown or west-end Toronto compares with South Mississauga.

Market dynamics

• Downtown or west-end Toronto has a high volume of condo projects and strong transit access. In stronger markets, assignment activity can be higher with larger premiums and higher absolute price points.
• South Mississauga, including areas like Port Credit and Clarkson, is growing along transit corridors such as the Hurontario LRT. Prices can be lower than downtown Toronto depending on the project and location.
• Downtown resale markets are typically deeper, which can matter if your exit plan is to resell or rent soon after closing.

Commute and transit

• Toronto offers multiple TTC routes, streetcar lines, subway access, and GO Transit options. This can support rental demand and resale liquidity.
• South Mississauga benefits from GO stations, the QEW, and the Hurontario LRT influence. For some commuters, this mix balances city access with a suburban lifestyle.
• Test actual peak-hour travel times. Reliability matters if your work hours are fixed.

Carrying costs and parking

• Interim occupancy fees can add up if registration is delayed. Budget for that period, especially if you plan to rent before final closing.
• Parking allocations differ by project. Downtown units may have limited or higher-cost parking. South Mississauga projects may include or price parking differently. Confirm what transfers with the assignment.
• Property taxes and condo fees vary by municipality and building. Ask for estimates and factor them into your monthly budget.

Quick comparison checklist

• Confirm the developer’s consent rules and admin fee for the specific project.
• Check commute options near the building and test travel times during rush hour.
• Ask for interim occupancy fee estimates and the projected registration window.
• Verify parking allocation and costs. Ask about storage lockers.
• Obtain a mortgage pre-approval that covers assignment purchases and your expected closing date.
• Request comparable assignment sales, if available, to assess the premium.
• Ask about construction status and any reported delays.

Who pays what on an assignment?

There is no single rule. Many costs are negotiable between assignor and assignee and should be written into the assignment agreement.

• Developer consent or admin fee. Often payable as a condition of consent. Decide upfront who covers it.
• Commissions. Set out in the listing and negotiated in the offer.
• HST on the assignment premium. Clarify how it will be handled in the price and who is responsible.
• Adjustments at closing. Spell out occupancy fee adjustments, utility and tax adjustments, and any builder chargebacks.

Clarity avoids disputes. Your lawyer will tailor the agreement to match the project’s APS and the developer’s policies.

Smart next steps

• Get the developer’s assignment policy. Ask for consent requirements, timing, and fees in writing before you make or accept an offer.
• Line up assignment-savvy professionals. Choose a lawyer and lender familiar with pre-construction assignments, plus an agent who knows the Toronto and South Mississauga markets.
• Map your total cost. Include HST implications, land transfer tax at title, legal fees, and occupancy fees.
• Right-size your search. Downtown or west-end Toronto may fit if you want deep transit access and strong rental demand. South Mississauga may fit if you value a suburban feel with GO and LRT connectivity.

If you want a steady guide who understands both Toronto’s core and South Mississauga’s lakeshore communities, let’s talk. With more than $800M in sales and 1,200 plus families helped, our team delivers calm, process-driven support from first questions to keys in hand. Start a conversation with Brian Peterson to plan your next move.

FAQs

What does “developer consent” mean in an assignment?

• Most APS agreements require the builder’s written consent before you can assign; without it, assigning can breach your contract and the deal cannot proceed.

Do you pay HST on the assignment premium?

• HST may apply to the assignment premium depending on how the transaction is characterized under new housing rules; get guidance from your lawyer and accountant.

When is land transfer tax due for assignments in Toronto?

• You generally pay provincial and Toronto municipal LTT when you take title at final closing; whether LTT applies earlier depends on the deal structure.

Can the assignor be released from liability after assigning?

• Only if the developer issues a formal release or novation; otherwise the assignor may remain liable under the original APS.

How do lenders view assignment purchases?

• Policies vary by lender; obtain pre-approval specific to an assignment purchase and confirm documentation and timing requirements early.

Does Tarion warranty coverage transfer on assignment?

• Warranty coverage is attached to the unit and typically transfers for the remaining period; confirm the transfer details and coverage dates with your lawyer.