Do I have to report the profit from selling a condo assignment on my income tax?

Yes, profit from an assignment sale must be reported to the Canada Revenue Agency. The key question is how it is characterized — as a capital gain or as income — because the tax treatment differs significantly.

If the CRA determines your assignment profit is income from a business (or from an adventure in the nature of trade), 100% of the profit is taxable. If instead the profit qualifies as a capital gain, only 50% is included in your taxable income (note: the capital gains inclusion rate may change — confirm the current rate with an accountant). The CRA tends to treat assignment profits as income rather than capital gains, particularly when the original purchase was made shortly before the assignment, when the buyer had no intention of occupying the unit, or when the buyer has a pattern of similar transactions.

There is no simple safe harbour. The CRA has publicly stated that it scrutinizes assignment transactions and audits in this area have increased. Relying on the premise that assignment profit is automatically a capital gain is risky.

Beyond income tax, there may be HST consequences (as noted separately). Speak with a Canadian tax accountant, not just a general financial adviser, before you complete the assignment sale. Proper reporting and tax planning before the transaction is far less costly than CRA reassessments afterward.