Assignment Sales in BC: What First-Time Buyers Should Know Before Buying One

An assignment sale can look like a shortcut into a new condo. At FRIVE, we see it both ways, for some buyers it is a shortcut, but for most first-time buyers it's a tangle with more moving parts than a standard purchase. The basic idea is simple enough, you take over someone else's presale contract before the building is finished, but the consent rules, the fees, and especially the tax picture catch people off guard. This guide walks through how assignments work and what to check before you sign one.

This is general information, not legal or tax advice. Assignments are one of the areas where you genuinely need a lawyer and, often, an accountant. Talk to both before relying on anything here for a specific deal.

What an assignment sale actually is

When a developer sells a home before it's built, that's a presale, our guide to buying a presale condo or townhouse covers the basics. The buyer signs a contract and pays deposits, but the building doesn't exist yet, so no title changes hands until completion, often years later.

An assignment sale happens when that original buyer wants out before completion. Instead of waiting to take title and then reselling, they sell their contract, the right to complete on the home, to a new buyer. You, the new buyer, step into their shoes, take over the contract, and complete the purchase directly with the developer when the building is finished.

The one distinction that matters: you're not buying a finished home with an owner and a title. You're buying a contract and the rights that come with it. Everything strange about assignments flows from that fact.

The developer usually has to say yes

You can't simply hand a presale contract to whomever you like. Most presale contracts require the developer's written consent to assign, and developers commonly charge an assignment fee and attach conditions. Some contracts restrict assignments heavily or prohibit them outright.

So before anyone counts on an assignment going through, both the original buyer and the new buyer need to read the specific contract and confirm what it allows. The assignment fee, and who pays it, is a real cost that belongs in your math from the start.

The tax picture: three things that can apply

This is where assignments get genuinely complicated, and where we see first-time buyers blindsided.

First, GST. Since May 7, 2022, under federal rules, assignment sales of newly constructed residential housing are generally taxable for GST (BCREA). There can be an exception where the original buyer entered the presale intending to live in it as their principal residence, but the treatment is fact-specific and complex. You need to know who bears the GST and how much it is before you commit, because it can be a large number.

Second, the BC home flipping tax. This provincial tax took effect January 1, 2025, and it can apply to profit from selling a property, or assigning a contract, held for less than two years. The rate is highest when the holding period is under 365 days (20% of the profit) and declines to zero by 730 days (Government of British Columbia). This generally hits the seller's profit, not the buyer directly, but it shapes the deal and the seller's pricing, so it's worth understanding.

Third, income tax. The Canada Revenue Agency looks closely at the original buyer's intent. Profit from an assignment can be treated as a capital gain or as fully taxable business income depending on the circumstances, and the CRA scrutinizes patterns of assignment activity.

The practical takeaway: there are several tax layers here, they interact, and they're not something to guess at. A first-time buyer considering an assignment should have an accountant confirm the tax exposure on the specific deal before signing.

Is an assignment actually a deal?

Sometimes. The price depends on what the original buyer paid, what they're asking now, and the assignment fee. An anxious seller who needs out might price below current market; another might want a premium because values rose since they signed. You also inherit the original contract's terms and deposit obligations, which you didn't negotiate.

So "assignments are cheaper" isn't a rule. Run the full numbers, purchase price, assignment fee, GST, deposit structure, and closing costs, before assuming you've found a bargain. Our explainer on the difference between a deposit and a down payment is worth a read, because assignment deposit structures can be more involved than a standard resale.

What a first-time buyer should check

Treat an assignment like a presale with extra scrutiny, not a shortcut that lets you skip due diligence. The things to nail down before you sign:

The contract terms you're taking over, in full, since you're bound by what the original buyer agreed to. The developer's consent and the assignment fee. The GST liability, confirmed by a tax professional. The completion-date situation, since you're buying into an unfinished building and timelines can move. And the deposit and payment structure, so you know exactly what's due and when.

Because there are more moving parts than a resale, use a lawyer experienced specifically with presales and assignments. This is not the place for a do-it-yourself approach or a generalist who rarely sees these deals.

The deposit and completion risk

When you take on an assignment, you're typically stepping into the original buyer's deposit obligations and committing to complete on the building when it finishes. That sounds straightforward until you think about what completion means for your financing.

With a regular resale purchase, your mortgage approval is tied to a property that exists today, at a value an appraiser can confirm today. With an assignment, completion may be months or years away, and when the building is finally ready, your lender will order a new appraisal at that point in time. If the appraised value at completion comes in lower than the price you paid on assignment, your lender may not fund the full amount you were counting on. You'd need to cover the gap out of pocket, at closing, with no time to spare.

That's a real scenario, not a theoretical one. We've seen buyers who were pre-approved for an amount that covered their assignment purchase price arrive at completion to find the appraised value was lower than expected, and scramble to find the difference. A pre-approval tells you what a lender thinks they could lend you today, based on today's market. It doesn't guarantee what happens when an appraiser values a unit that didn't exist when you wrote the offer.

For a first-time buyer used to thinking about qualification in terms of income and debt ratios, this is a different kind of risk to understand. The question isn't just "can I qualify?", it's "can I close if the appraisal doesn't support what I paid?" If you don't have the flexibility to cover a gap at completion, factor that into whether an assignment is the right move for your situation. Our guide to buying a presale condo or townhouse in the Fraser Valley covers the broader completion-risk picture for new construction.

Deposits in an assignment also work differently than a standard resale deposit. You may be taking over the original buyer's deposit, money they already paid to the developer, and reimbursing them directly as part of the assignment price. Your own financing at completion is the full purchase amount, less whatever deposits are already held by the developer. Work through the deposit structure carefully with your lawyer before you sign.

What to verify in the original contract

An assignment means you are inheriting the original purchaser's contract terms, not negotiating fresh ones. Whatever the original buyer agreed to with the developer, the price, the deposit schedule, the specifications, the penalty clauses, that is what you're buying into. Some of those terms might be better than what's available on the market today. Some might not be.

The single most important step here is having your own lawyer review the full, original Contract of Purchase and Sale before you proceed. Not a summary of it. The whole document. That's the only way to know what you're actually agreeing to.

There are specific things worth looking hard at. The estimated completion date is one of them, presale timelines shift regularly, and the completion date in the original contract may be earlier than the developer's current projected schedule. Confirm with the developer's current communications what completion is actually expected to look like, not just what the contract says.

Look also at any allowance credits the original buyer may have been promised, appliance allowances, upgrade credits, colour-selection allowances. Whether those transfer to you as the assignee, or whether they die with the original contract, depends on what the documents say. Don't assume they carry over.

The developer's assignment fee is another real cost to nail down before you get attached to the deal. Some developers charge a flat fee; others charge a percentage of the purchase price. That fee is typically borne by the buyer or split, and it belongs in your budget calculation from the start, not as a surprise after you've already committed emotionally.

Finally, check any restrictions the original contract placed on rental, age, or use of the unit. If the developer put restrictions in the original presale agreement, you inherit them. A unit with a rental restriction may not suit your plans, and an assignment isn't a way to get around what the developer locked in.

Our honest take

As a team that works with end-user buyers, people buying a place to live, not to flip, we'd say an assignment can be a legitimate path into a new home if you go in with clear eyes and good advice. What it isn't is a clever way to save money while doing less homework. If anything, an assignment needs more scrutiny than a normal purchase, because the contract, the consent, and the taxes all sit on top of the usual presale risks.

If you're looking at an assignment and want help thinking through whether it makes sense for your situation, reach out to the FRIVE team, we'll help you frame the questions for your lawyer and accountant, or you can browse completed listings if a finished home turns out to be the simpler path.

Related guides

• Strata contingency reserve fund: what a healthy balance looks like, the reserve fund is something to check once you take possession of a presale
• Buying presale condo or townhouse in the Fraser Valley, the full lifecycle from deposit to completion on a new-build purchase