- Where a presale contract permits assignment, it must prohibit assignment without the developer's prior consent.
- Assignments are reported to the Condo and Strata Assignment Integrity Register (CSAIR), and profit must be reported on the assignor's income tax return.
- Assigning can trigger property transfer tax, the BC home flipping tax and GST/HST, so get tax advice before you agree to sell.
If you can't or don't want to complete your presale purchase, you may be thinking of selling your place in the contract to someone else before the building is finished. This is called an assignment. You are the assignor, and the person taking over is the assignee.
Assignment is not a right in every contract, and in British Columbia it comes with consent, reporting and tax consequences. This article walks through the main points so you can ask better questions before you list or sign anything.
This article covers the law of British Columbia.
Whether assignment is allowed at all
Start with your own contract. Whether you can assign depends on what it says. Where a presale purchase agreement permits assignment, it must contain a term prohibiting any assignment without the developer's prior consent. For an assignor, that means the developer must consent to the assignment.
If your contract does not allow assignment, you may still have other options, such as negotiating with the developer. A lawyer can review the wording and tell you where you stand.
Developer consent and the CSAIR register
The developer must not consent until it has collected the prescribed information and records from each party, and it must report the assignment to the Condo and Strata Assignment Integrity Register (CSAIR). Even where consent is not required, the developer must make reasonable efforts to collect the information needed to report the assignment.
Developers keep copies of every consented assignment agreement for at least 6 years after the strata plan is deposited. Because the developer must collect prescribed information and records from each party, both you and your assignee should expect to be asked for details about the deal. It helps to ask the developer early what it needs, so that your timeline is not held up.
The tax consequences
Several taxes can apply to one assignment. The table below sets out the main ones. Your own outcome depends on your situation, so confirm with an accountant.
| Tax | What the rules say |
|---|---|
| Property transfer tax | Calculated on the total amount paid, including upgrades and any premium paid for assigning, if the assignment is made before the strata plan is deposited at arm's length; after deposit, fair market value rules apply instead |
| BC home flipping tax | 20% of net taxable income on property disposed of within 365 days, decreasing over the next 365 days and ending at 730 days; assigning a presale contract can be taxable |
| Income tax | CRA treats profit from an assignment sale as business income reported in the year the rights were assigned |
| GST/HST | If the property is a new build, the total received on assignment, including any deposit, is subject to GST/HST |
The final purchaser pays property transfer tax on the total amount paid including upgrades, and any profit must be reported on the assignor's income tax return.
Home flipping tax details and exceptions
The tax is under the Residential Property (Short-Term Holding) Profit Tax Act, effective January 1, 2025. The primary residence deduction is not available on assignment. For presale contracts, the holding period starts on the date you pay for the contract (usually the deposit) and ends when you receive money from the assignee.
A return is due within 90 days of the sale if the contract was disposed of within 729 days and no exemption applies. Government pages describe the cut-off as both 729 and 730 days, so confirm the exact timing with a tax professional.
Some assignments may be exempt. One is where the estimated completion date on the presale contract is delayed by more than 365 days; presale contracts do not qualify for the builder or developer, renovation or exclusive commercial use exemptions. Other exemptions include life circumstance exemptions and dispositions between related persons (both require filing), plus exempt locations and entities such as First Nations lands and registered charities (no return needed).
Special cases and next steps
- If a foreign national or foreign corporation signs the original contract and assigns it to a Canadian citizen or permanent resident before registration, the additional property transfer tax does not apply, though penalties can apply if the assignment was made to avoid tax.
- Assignments to affiliated or newly formed corporations or your own corporation are often non-arm's length, and family members are generally presumed not at arm's length; property transfer tax is then based on the amount that would have been paid at arm's length on the open market.
- Read the assignment clause in your contract
- Ask the developer about its consent process and what information it needs
- Estimate property transfer tax, home flipping tax, income tax and GST/HST with an accountant
- Have a lawyer review the assignment agreement before you sign
- Keep records of your deposits and payment dates
Frequently asked questions
Do I need the developer's consent to assign?
Where a contract permits assignment, it must prohibit assignment without the developer's prior consent, and the developer must collect prescribed information before consenting. For an assignor, the developer must consent.
Who pays property transfer tax on an assignment?
The final purchaser pays property transfer tax on the total amount paid, including upgrades. For an arm's length assignment made before the strata plan is deposited, that includes any premium paid for assigning the agreement.
Will I owe the home flipping tax?
It can apply to assigning a presale contract, at 20% of net taxable income if disposed of within 365 days, decreasing over the next 365 days. Some exemptions exist, such as a completion date delayed by more than 365 days. An accountant can apply this to your facts.
Is my profit on assignment taxable income?
CRA treats profit from an assignment sale as business income reported in the year the rights were assigned. Any profit must also be reported on the assignor's income tax return.
Sources
- gov.bc.ca – Developers of pre-sale condos (CSAIR) — www2.gov.bc.ca
- gov.bc.ca – Assignors of pre-sale condos (CSAIR) — www2.gov.bc.ca
- gov.bc.ca – Property transfer tax on pre-sold strata units — www2.gov.bc.ca
- gov.bc.ca – BC home flipping tax — www2.gov.bc.ca
- gov.bc.ca – BC home flipping tax: pre-sale contracts — www2.gov.bc.ca
- gov.bc.ca – BC home flipping tax: exemptions — www2.gov.bc.ca
- CRA – GI-120 Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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