An assignment sale is a type of real estate transaction that occurs when a buyer of a pre-
construction home or condo decides to sell their rights to purchase the property to another
buyer before the construction of the building is complete. This type of sale transfers the
purchase agreement from the original buyer to the new buyer (known as the “assignee”)

As of May 2022, the government introduced a new rule requiring HST (Harmonized Sales Tax)
to be paid on all assignment sales of single-unit residential or condo properties that are newly
constructed or renovated. This means that the assignee must pay HST on the difference
between the original purchase price and the resale price.

For example, if a pre-construction home was originally purchased for $500,000 and then sold as
an assignment sale for $600,000, the assignee must pay $13,000 in HST (calculated as 13% of
$100,000, which is the difference between the original purchase price and the resale price).

It is the responsibility of the lawyers involved in the transaction to make sure that the HST
portion is remitted correctly, taking into account various factors such as the date of the
assignment and the completion date of the building.

Despite the introduction of HST, an assignment sale still continues to have many benefits, such
as being a more convenient way for original buyers to sell their rights to the property without
having to go through hurdles of selling a fully completed property.