Assignment Clauses Explained: Can You Sell a Presale Before Closing?

A presale contract isn't the same thing as owning a home, until the building is complete and registered at the Land Title Office, what you actually hold is a contract to buy. Selling that contract before completion is called an assignment, and in BC it's a more structured process than simply relisting a property. It runs through the developer's own assignment clause, a provincial reporting requirement, and two separate layers of tax that a lot of buyers and sellers don't find out about until it's too late to plan around them.

What an assignment actually is

When you assign a presale contract, you're not selling the condo, the condo doesn't exist yet, or isn't registered to you yet. You're transferring your rights and obligations under the purchase agreement to a new buyer, called the assignee, who steps into your shoes and completes the purchase directly with the developer when the building is finished. You, the assignor, are typically reimbursed for the deposits you've already paid plus whatever profit has built up between your original contract price and the new sale price.

The developer's assignment clause controls the process

Almost every BC presale contract includes an assignment clause, and it's usually restrictive by design. Two things are typical:

• Consent is required. The developer must approve the assignment before it can proceed, and most contracts give them broad discretion to refuse, for any reason, or none at all, unless the contract says otherwise.
• A fee applies. Developers commonly charge a consent fee, often cited in the range of roughly 1% to 3% of the original purchase price, though the exact structure is set out in your specific contract and can be a flat amount instead. This is usually paid by the assignor.

Some developers prohibit assignment outright, particularly in the early phases of a project when they want to control resale activity themselves. Read your contract's assignment clause before you assume you have a way out if your plans change.

Every assignment gets reported to the province

Since 2019, BC has required developers to collect and report detailed information on presale assignments, the parties involved and the price paid, to the Condo and Strata Assignment Integrity Register (CSAIR). This was introduced specifically to give tax authorities visibility into assignment profits, which had historically been hard to track. Any profit you make on an assignment needs to be reported on your income tax return, and CSAIR data gives the CRA and BC's tax authorities a way to cross-check that.

GST/HST: it applies to the profit, not just the sticker price

Since May 7, 2022, all assignment sales of newly constructed or renovated residential housing have been taxable for GST/HST purposes, under rules the CRA sets out in GI-120. The mechanics matter:

• For assignment agreements entered into on or after May 7, 2022, GST/HST generally applies to the assignment fee or profit portion, not the deposit reimbursement, but only if the agreement clearly separates the deposit repayment from the profit, in writing.
• For agreements entered into before that date, any deposit amount included in the assignment price is also subject to GST/HST.
• The assignor is generally responsible for collecting and remitting the tax on the profit, regardless of whether they originally intended to flip the contract. If the assignor is a non-resident of Canada, the assignee may need to self-assess and remit the tax directly.

This is a detail that catches people off guard: an assignment agreement that doesn't explicitly break out the deposit can end up taxed on the full price, not just the gain.

The BC home flipping tax adds a second layer

Since January 1, 2025, BC's home flipping tax applies to residential property, including presale contracts, disposed of within 730 days of acquisition. For a presale, the clock starts on the date the original contract was signed, not the possession date, per the province's pre-sale contracts guidance. The rate is 20% of net taxable income within the first 365 days, declining on a sliding scale to 0% at the 730-day mark. A handful of exemptions exist, job relocation, death, disability, but the primary-residence exemption isn't available for an assigned presale contract, since nobody has actually lived in a unit that hasn't been built.

Between GST/HST on the profit and a potential home flipping tax liability, the after-tax return on a short-hold assignment can look different from the headline price gain. This is a "talk to an accountant before you sign" situation, not a back-of-napkin calculation.

The risk for the assignor

You need the developer's consent, a fee paid, and a buyer willing to take on a contract for an unfinished home, all potentially against your own contractual deadlines. If your deal falls through and the developer's approval window closes, you may be stuck completing the purchase yourself. And if you're inside the 730-day window, the home flipping tax is a real cost to model before you price the assignment.

The risk for the assignee

You're buying a contract, not a finished home. There's no walk-through of the actual unit, no way to fully inspect finishes before completion, and construction timelines can shift, sometimes by months. Your mortgage pre-approval needs to remain viable until an as-yet-unbuilt unit is ready to close, and you inherit whatever terms, deficiencies, or ambiguities exist in the original purchase agreement, since you're stepping into that same contract rather than negotiating a fresh one.

A simple example of how the money splits

Say you signed a presale contract at $650,000 with a $65,000 deposit paid to the developer over the construction period, and the unit is now assessed to be worth $780,000 as completion approaches. If you assign the contract to a new buyer for $780,000, the assignee typically pays you back the $65,000 deposit (reimbursement, not taxable if properly documented) plus the $130,000 difference between your original price and the new price (the profit, which is subject to GST/HST and reportable as income). On top of that, the developer's consent fee, commonly cited in the 1% to 3% range of the original purchase price, comes off your side of the ledger, and if you're inside the 730-day home flipping tax window, a portion of that $130,000 profit could also be taxed provincially. The number that lands in your pocket after fees and taxes is often meaningfully smaller than the headline "$130,000 profit" suggests, which is exactly why running the actual math, ideally with an accountant, before pricing an assignment matters more than the sale price alone.

Timing considerations that catch people off guard

Assignments live under real deadline pressure that a resale of a completed home doesn't have. The developer typically needs to approve the new buyer, including a review of their financial qualifications, before the assignment can close, and that review takes time. If your original contract's deposit or completion deadlines are approaching and a developer's approval process stalls, you can end up in a position where you either need to complete the purchase yourself or scramble for a faster-closing buyer. Building in a realistic timeline for developer consent, rather than assuming it will be quick, is one of the more overlooked parts of planning an assignment sale.

What this comes down to

• An assignment sells the contract, not the property, the underlying purchase agreement, deposits, and terms all transfer to the new buyer.
• The developer's assignment clause, not the open market, decides whether and how you can sell, consent and a fee are the norm.
• Every assignment gets reported to the province through CSAIR, and any profit needs to be reported on your tax return.
• GST/HST applies to the profit portion of an assignment since May 2022, provided the deposit reimbursement is documented separately.
• The BC home flipping tax can apply if the original contract was signed less than 730 days before the assignment closes, the clock starts at signing, not possession.
• Both sides carry real risk: the assignor needs developer approval and a willing buyer under deadline pressure; the assignee is buying a home they can't fully inspect yet.

This article is general information, not legal, tax, or financial advice. Assignment contracts, GST/HST treatment, and the BC home flipping tax all depend on your specific facts, confirm the details with a real estate lawyer or notary and an accountant before signing or relying on any of the above.

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