Assignors typically pay a builder assignment fee (a flat fee or a percentage of the price, set by your agreement), legal fees for their own lawyer and sometimes the builder’s, realtor commission if they use one, and taxes: GST/HST on the profit portion plus income tax on the gain. Your purchase agreement sets the builder’s charges.
Key takeaways
- Check your Agreement of Purchase and Sale for the exact assignment fee and conditions.
- Some builders waive or reduce fees, especially after the project sells out; others prohibit assignments entirely.
- Commission is negotiable and is often calculated on the full assignment price or on the profit.
- Taxes are usually the biggest cost. Get tax advice before you price the unit.
What does the builder charge for an assignment?
Builders set their assignment terms in the purchase agreement. Common approaches are a flat administration fee or a percentage of the original purchase price, plus a charge to cover the builder’s legal costs for preparing the consent. Some agreements allow one free assignment to a family member; others ban assignments before occupancy or until the builder has sold all units. There’s no standard amount, so the only reliable number is the one in your agreement or the builder’s current assignment policy.
What other costs should I budget for?
- Your lawyer: to review the builder’s terms, prepare or review the assignment agreement and handle the funds.
- Realtor commission: optional, and negotiable. Clarify whether it’s based on the total assignment price or just the profit.
- GST/HST on the portion above the deposit refund (see HST on assignment sales).
- Income tax on your gain (see how assignment profits are taxed).
- Carrying costs: any deposits still due before the assignment closes, and interim occupancy fees if you’ve already taken possession.
Worked example
| Item | Amount |
|---|---|
| Gross profit (assignment price minus original price) | $71,900 |
| Builder assignment fee (example only) | −$5,000 |
| Legal fees (example only) | −$2,000 |
| Commission (example: 2.5% of the $71,900 profit) | −$1,798 |
| Profit before income tax | $63,102 |
HST on the profit portion is either added on top of the price or absorbed by you, depending on your agreement. Figures are illustrative. Use our estimator with your own numbers.
How can I reduce the cost of an assignment?
- Read the assignment clause before you buy pre-construction, and negotiate it at purchase if you can.
- Ask the builder whether fees are reduced after sell-out or for certain buyers.
- Agree in writing whether the price is plus HST.
- List on a marketplace like Assignment Connect to reach buyers directly, and negotiate commission if you use a realtor.
Frequently asked questions
Who pays the builder’s assignment fee?
Usually the assignor, but it’s negotiable between the parties. Put it in the assignment agreement.
Can a builder charge whatever it wants to approve an assignment?
The builder’s charges are set by the terms of your purchase agreement. Read the assignment clause carefully and ask your lawyer if a fee seems inconsistent with it.
Is realtor commission on an assignment based on the profit or the price?
Either. It’s negotiable, so confirm the basis in your listing agreement.
Buying or selling an assignment?
Browse live assignments or post yours for free on Assignment Connect.
Sources
- CRA: Assignment of a purchase and sale agreement for a new house or condominium unit (GST/HST Info Sheet GI-120)
- CRA: Residential property flipping rule
- RECO: Buying or selling a pre-construction home
This guide is general information, not legal, tax or financial advice. Rules change and every agreement is different, so speak with a real estate lawyer, accountant or mortgage professional about your situation.