You only owe HST on the profit portion of an assignment sale, not the full assignment price, and definitely not the original purchase price. If your assignment sells for less than the deposits you already paid the builder, there's usually no HST owing at all. The harder question, and the one worth getting right before you sign anything, is whether that loss is deductible on your tax return.
Assignment listings are everywhere in the GTA right now. Toronto condo sales were down 11.3 percent year over year in the first quarter of 2026, average condo prices fell 9.1 percent over the same period, and pre-construction sales are sitting at their lowest point since 1991. A lot of people who bought in 2021 and 2022 are now staring at a closing date on a unit worth less than they agreed to pay, and assigning the contract, selling it to someone else before it closes, looks like the way out.
I've had this conversation with clients dozens of times over the past year, and it almost always starts the same way: someone assumes they'll owe HST on the entire assignment price, panics at the number, and considers just closing on a unit they can't really afford instead. Neither reaction is right. Before you list, you need to understand what you actually owe the CRA, because the number in your head is usually wrong in one direction or the other.
An assignment sale is a two-party handoff. You, the original buyer (the assignor), transfer your rights and obligations under the Agreement of Purchase and Sale to someone new (the assignee), before the building registers and before you ever take title. You're not selling a home. You're selling your spot in line.
Here's the part people get wrong: HST does not apply to the full amount your assignee pays you. It applies only to your profit.
Say your original agreement with the builder was for $700,000, and you've paid $105,000 in deposits so far (15 percent). If you find an assignee willing to pay you $145,000 total to step into your contract, here's how that breaks down:
So on a $145,000 assignment price, you'd owe $5,200 in HST, not $18,850 (which is what you'd get if you mistakenly applied 13 percent to the whole assignment price). That gap matters. It's the difference between a manageable tax bill and one that eats into money you were counting on for your next down payment.
You can also reduce that HST liability further with input tax credits for HST you paid on legitimate expenses tied to the assignment. Common ones include:
Each dollar of HST you paid on those expenses reduces your net HST owing, dollar for dollar. The GST/HST return itself is due no later than one month after the month the assignment closes, so this isn't something you can leave until tax season. Your lawyer should be building this into your closing paperwork, not treating it as an afterthought.
This is the more common scenario in the GTA right now, and it flips the math entirely.
Using the same example: original contract price of $700,000, deposits paid of $105,000. If the market has moved against you and the best offer you can get for your assignment is $90,000 total, you're getting back less than you put in. There's no profit portion here, which means there's no HST owed on the transaction.
That's the good news. The harder part is what happens to the $15,000 gap between what you paid in and what you're getting back, plus whatever appreciation you were counting on when you signed at $700,000 in the first place.
Whether that shortfall qualifies as a deductible capital loss depends on facts specific to your purchase: whether the unit was bought as an investment or intended for personal use, and whether the CRA would treat the transaction as a capital transaction or as business income. This isn't a question you want to guess at. It's exactly the kind of thing your accountant or real estate lawyer needs to look at before you sign the assignment agreement, not after.
This is also the point where a lot of people make a decision under stress that they wouldn't make otherwise. I've talked to assignors who were ready to accept the first lowball offer just to be done with it, without confirming whether a different assignment price, a slightly longer marketing period, or even closing and renting the unit out for a year might leave them further ahead once the full tax picture is accounted for. The right move depends entirely on your numbers, your timeline, and how much carrying cost you can absorb, and that's not something a single blog post can answer for your specific unit.
The volume of assignment listings has grown noticeably through 2026, and the tone around them has shifted. A lot of assignors are finding that the market has moved against pre-construction (see: GTA Home Prices Below $1 Million: What the January 2026 Data Actually Tells Us, connect.ca/learn) in a way that makes the exit harder than the entry was. Some listings are sitting for months with no serious offers, because right now the buyers who are active in this space tend to be well-capitalized and unhurried.
If you're on the buyer side of an assignment instead, the tax and closing mechanics are different again, and they connect directly to two other decisions you'll face at closing: what happens if your unit's appraisal comes in below the purchase price (see: What to Do If Your Toronto Pre-Construction Condo Appraises Below Your Purchase Price), and how HST rebates work on new builds if you're buying to occupy rather than to flip. If you haven't looked at how the Ontario HST rebate applies to new home purchases (see: Ontario HST Rebate on New Homes 2026, connect.ca/learn/ontario-hst-rebate), it's worth understanding before you assume your rebate eligibility carries over cleanly through an assignment, because the rebate is tied to your original agreement date, not the date you signed the assignment.
Buying an assignment can be a genuine opportunity right now. Some assignors are motivated enough to price realistically, and you're stepping into a contract on a building that may be closer to completion than a fresh pre-construction launch. But you're inheriting someone else's paper trail, so confirm the original agreement date before you get attached to a unit, verify the builder has actually consented to the assignment in writing, and get your own lawyer to review the assignment agreement rather than relying on the assignor's lawyer to explain it to you. None of these steps take long, and skipping them is how buyers end up surprised at closing.
A few things worth confirming before you list an assignment or make an offer on one:
Every one of these depends on the specific wording of your agreement and your personal tax situation. This isn't tax or legal advice, and the numbers above are illustrative examples, not a calculation of what you'll owe. You'll want to confirm your exact HST and capital loss position with a real estate lawyer and an accountant before you sign anything.
Just your profit. HST applies to the difference between what your assignee pays you and the deposits you're being reimbursed for, not the total assignment price and not the original contract price with the builder.
If your assignment price is less than the deposits you've already paid, there's typically no profit and therefore no HST owing on the transaction. You may still have a financial loss, but that's a separate question from HST.
It depends on whether the CRA views your original purchase as a capital property or as inventory tied to business income, which comes down to your intent when you bought. This is fact-specific enough that you need an accountant to review your situation directly rather than assuming either answer.
Almost always, yes. Most Agreements of Purchase and Sale require the builder's written consent before you can assign, and assigning without it can put you in breach of your original contract.
Rebate eligibility is tied to the date of the original Agreement of Purchase and Sale between the builder and the first buyer, not the date of your assignment agreement. If that original agreement predates the eligibility window for a given rebate program, buying the assignment doesn't reset the clock.
If you're weighing whether to assign a pre-construction unit, or you're looking at an assignment listing and trying to work out what you'd actually owe, I'm happy to walk through the numbers with you before you commit to anything. Reach out anytime at ryan@connect.ca, or send your details through this form and we'll get back to you.
About Ryan Coyle
Ryan Coyle is a Toronto real estate broker and investor with more than 20 years in the industry and over $2 billion in real estate transactions. He personally holds a portfolio of 40+ doors and helps buyers, sellers, and investors build long-term wealth through Toronto real estate. Ryan leads Connect, a full-service GTA brokerage focused on the downtown core and north Toronto's luxury market. Learn more at connect.ca.
