Buying, Selling & Market Trends

Pre-Construction Condo FAQ: Assignment, HST, and What's Actually in Your Agreement (Ontario)

By CRESI Real Estate · Published July 22, 2026 · Updated July 22, 2026 · 5 min read

Answers to the pre-construction condo questions that go beyond the deposit and the closing timeline: whether you can assign your contract, how HST and the new-housing rebate apply, what's actually in the purchase agreement, how upgrade payments work, and what happens if the builder delays or cancels the project.

Beyond the deposit schedule and closing timeline, the pre-construction questions buyers ask most often are: can I sell my contract before closing, how does HST and its rebate apply, what does the purchase agreement actually commit me to, how do upgrade payments work, and what are my options if the builder delays or cancels the project.

Can I Sell My Purchase Agreement Before Closing?

Only if your purchase agreement allows it. An assignment lets you sell your rights and obligations under the contract to a new buyer before the building closes, but whether you can do this — and on what terms — is entirely governed by the agreement you signed, not by a general right to assign.

Most builder agreements restrict assignment, require the builder’s written consent before it can happen, and may charge an administration fee for processing it. Some prohibit assignment outright or only permit it during a limited window before closing. If keeping this flexibility matters to you, have a real estate lawyer review the assignment clause before you sign the original agreement, not after — by the time you want to assign, the terms are already fixed.

Does Assigning My Unit Affect My Deposit or Upgrade Payments?

Yes — in an assignment sale, the deposit and any upgrade payments you’ve already made to the builder are typically credited to the new buyer (the assignee) as part of what they pay you for the assignment, rather than refunded to you directly by the builder.

In practice, the price you negotiate with the assignee usually reflects the amount you’ve paid in toward the unit, plus or minus whatever the assignee is willing to pay for the contract itself. The assignee then steps into your original agreement, including any remaining deposit instalments still owed to the builder. Because the mechanics vary by builder and by agreement, ask your lawyer to confirm exactly how your specific deposit and upgrade payments are treated before you price an assignment.

Is an Assignment Sale Taxed Differently Than a Regular Home Sale?

Possibly — and this is a question for a tax professional, not a general guide. The tax treatment of profit from an assignment sale can differ from the tax treatment of a regular resale, depending on factors specific to your situation.

Because getting this wrong can be costly, don’t rely on assumptions carried over from a typical home sale. Speak with an accountant or tax professional before you assign a unit, so you understand how any profit will be treated before you commit to the sale.

Do I Pay HST on a New Pre-Construction Condo?

Yes — HST generally applies to the purchase of a new condo unit from a builder, but a rebate exists that can offset part of it, and which rebate route applies depends on how you intend to use the unit.

	Principal-residence route	Landlord/rental route
Who it’s for	A buyer who will occupy the unit as their principal residence	A buyer who intends to rent the unit out
Rebate mechanism	The new-housing rebate	A separate rebate mechanism for landlords, tied to a qualifying lease
When it’s applied for	Often assigned to and credited by the builder directly at closing; can also be applied for directly afterward	Typically after closing, once the rental arrangement is in place
Where to confirm current eligibility	CRA	CRA

Eligibility rules, application deadlines, and current program details are set by the CRA and can change — confirm your specific eligibility and how to apply directly with the CRA or a tax professional rather than relying on what a builder’s sales team tells you.

What’s Actually in My Purchase Agreement Beyond the Price?

More than the unit price and deposit schedule. A pre-construction purchase agreement is a lengthy contract package, and along with it you’re entitled to a separate disclosure statement describing the project and the condominium corporation to be created. Typical contents include:

The deposit instalment schedule and how those funds are held or protected.
Interim occupancy fee terms — how your occupancy-period payments are calculated once you can move in but before the building is legally registered.
Development levies, utility hookup charges, and other closing adjustments the builder may pass through at closing.
The builder’s Tarion warranty enrolment and the addendum setting out tentative, firm, and outside occupancy dates.
The builder’s reserved right to make certain changes to unit specifications, materials, or the building plan, usually with notice.

Because this package is drafted to protect the builder, have a real estate lawyer review the full agreement and disclosure statement — not just the price and floor plan — before you’re committed.

How Do Upgrades and Design Centre Selections Work?

Builders typically require you to choose finishes and any paid upgrades through a design centre appointment, usually within a set window after you sign, tied to the building’s construction schedule.

Amounts you pay for upgrades are generally collected in addition to your base deposit, and they may or may not carry the same trust or insurance protection as your deposit — this depends on your specific agreement and builder. Ask your lawyer to confirm how upgrade payments are held, whether selections can be changed or cancelled once made, and what happens to any upgrade payments if you later assign the unit or the project doesn’t proceed.

What Are My Options If the Builder Delays or Cancels the Project?

Your purchase agreement and Tarion’s addendum set out tentative, firm, and outside occupancy and closing dates, and builders are generally permitted to extend within those dates for reasons defined in the agreement — this isn’t automatically a breach. If the project is cancelled entirely before it’s built, your deposit is returned to you under the protections described in your agreement and the Condominium Act.

Delays beyond what the agreement and Tarion’s rules permit, and outright cancellations, both trigger specific rights and, in some cases, compensation mechanisms — the details depend on your addendum and current Tarion rules, which can change. If your closing is delayed longer than the dates in your agreement allow, or the project is cancelled, have your lawyer confirm your options and any compensation you may be entitled to under your specific agreement and Tarion’s current program.

Frequently asked questions

Does the HST new-housing rebate still apply if I originally planned to live in the unit but end up renting it out instead?

Possibly not in the same way. The rebate route tied to using a unit as your principal residence is different from the route available to a landlord renting the unit out, and switching your intended use after signing can affect which rebate applies and how you apply for it. Confirm your specific situation with the CRA or a tax professional before or after closing, since eligibility depends on actual use, not just your original plan.

If I buy a unit through an assignment instead of directly from the builder, do I inherit the original buyer's warranty and deposit protections?

Generally yes for the warranty — Tarion's new-home warranty coverage runs from your own possession (interim occupancy) as the purchaser of record, rather than continuing a clock that started with the original buyer, so as the assignee you receive the full warranty term measured from your own possession, not the original buyer's. That's different from buying a unit resale after someone has already lived in it, where the warranty clock is already running from the original owner's possession and a buyer simply inherits whatever term is left. Deposit protection works differently: as the assignee, the amount you pay the assignor for the deposit and any upgrades isn't the same as a builder-collected deposit, so ask your lawyer to confirm exactly what protection applies to the funds you're paying in an assignment.

Can the development levies and closing adjustments named in my purchase agreement change between signing and closing?

Often yes. Many purchase agreements set development levies, utility hookup charges, and other closing adjustments as amounts the builder can pass through at closing rather than fixed figures agreed upfront, and they can turn out higher than initial estimates by the time your unit closes. Ask your lawyer to review whether your agreement caps these charges or leaves them open-ended, and negotiate a cap during your rescission period if one isn't already included.

What happens to my deposit and upgrade payments if I want to cancel for my own reasons, not because of a builder delay?

It depends entirely on your purchase agreement's terms, since builders don't generally offer a no-reason cancellation right the way the statutory rescission period does. Outside that initial window, walking away typically means forfeiting some or all of what you've paid unless your agreement includes a specific condition you can rely on. Have a real estate lawyer review your specific agreement before assuming you can exit, and before you sign if this flexibility matters to you.

Do I need my own lawyer to review an assignment sale, or does the builder's consent process cover that?

Yes — have your own real estate lawyer review any assignment agreement, whether you're assigning your unit or buying one through assignment. The builder's consent to the assignment protects the builder's interests, such as confirming who's responsible for remaining obligations; it isn't a review of whether the assignment terms are fair to you, which is a separate negotiation between the assignor and assignee.