Every assignment of a new or substantially renovated home became taxable for GST/HST for supplies made after 6 May 2022. The old test — whether the assignor was a “builder” by intention — no longer decides it. But CRA’s published guidance and the legislation disagree about whether the deposit portion is taxable, and that disagreement is live today. On the land transfer tax side, the assignee pays on the original purchase price plus the assignment premium plus extras and upgrades.
Assignment sales are one of the few areas where I would tell you to read the government sources yourself, because the sources do not agree with each other. Here is what each one says.
General information, current as at 28 August 2026, sources dated below. Not legal or tax advice. Assignment transactions need a real estate lawyer and, on the HST question, an accountant — and this page is a good reason to involve both early.
What changed, and exactly when
CRA’s GST/HST Info Sheet GI-120 states: “Effective May 7, 2022, all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable for GST/HST purposes.”
CRA’s Notice 323 and the enacting legislation use the statutory formulation: the measure applies to “any supply by way of assignment of an agreement of purchase and sale if the supply is made after May 6, 2022.” Same boundary, two phrasings.
The statutory basis is section 192.1 of the Excise Tax Act, New housing — assignment of agreement, enacted by 2022, c. 10, s. 52. It applies where the assignment is made by a person other than the builder, deems it a taxable supply of real property, and sets the consideration by a formula.
Why this matters: before that date, whether an assignment was taxable turned on the assignor’s intention when they signed the original agreement — a genuinely arguable question. That test is gone. If you are relying on advice given before May 2022, it is out of date.
The deposit question — and I am not going to resolve it for you
This is the part with real money in it, because the deposit is often the largest component of an assignment price.
What the legislation and Notice 323 say
Section 192.1 sets the consideration as a formula in which the deposit amount is removed — but only where the assignment agreement “indicates in writing that a part of the consideration… is attributable to the reimbursement of a deposit paid under the purchase agreement.” Notice 323 states the same condition.
So on this reading: if the agreement says so in writing, the deposit portion comes out. If it does not, nothing comes out.
What GI-120 currently says
GI-120, as published today, reads: “the total amount payable for the sale of the interest is subject to GST/HST, including any amount the person paid as a deposit to the builder.” Its Example 5 goes further — on a $15,000 assignment price, “tax applies to the full $15,000. This is the case even if the assignment agreement identifies that the $10,000 is a recovery of the deposit.”
How to read the conflict
GI-120’s last revision date is 7 July 2022, and its deposit passages read as the pre-amendment rules; it does not cite section 192.1 anywhere. The statute and Notice 323 are the later and controlling statement of the law.
But GI-120 is still live on canada.ca in that form, so I am publishing this as an open conflict rather than telling you which one wins. That is your accountant’s call, not mine.
What is safe and practical: the written wording of your assignment agreement is what determines whether the deposit portion is carved out. If the agreement is silent, you have no argument under either reading. Have it drafted to address the point explicitly.
One further warning from Notice 323 itself: the change “may have an impact on both the total tax paid and the total consideration for the taxable supply of a new house, which may affect the amount of a GST/HST new housing rebate.” The rebate is not a side issue in these deals.
Buying pre-construction? Get the agreement reviewed before you sign.
The cooling-off period is short and the builder’s agreement is written for the builder. Send me the paperwork and I will tell you what is negotiable, what the real closing costs come to, and whether the deal makes sense at that price.
Call or text 437-987-1925 Send me the paperwork
Jatin Dua, Sales Representative — RE/MAX Quantum Realty Inc., Brokerage. Not intended to solicit buyers or sellers currently under contract with another brokerage.
Land transfer tax: the assignee pays on more than they think
Ontario’s Ministry of Finance is direct about it. On the transfer to the assignee, “the true value of the consideration… includes: the consideration for the assignment, the purchase price in the agreement assigned, and the value of extras, upgrades, installations, etc.”
So the assignee pays land transfer tax on the original purchase price, plus the assignment premium, plus upgrades. In Toronto that is both the provincial and the municipal tax on the whole of it.
Two refinements from the same source: HST is not included in determining the value of the consideration; but assigned New Housing Rebates do form part of it where HST was paid in full and the rebate was assigned to the vendor.
The 30-day rule on unregistered dispositions
Under section 3 of the Land Transfer Tax Act, tax is payable on the disposition of a beneficial interest in land at the same rates as a registered transfer. It is “payable on the 30th day after the date of the disposition”, with a return to the Ministry of Finance and a 5% penalty for failure.
No section 3 tax is payable if an instrument evidencing the disposition is registered within 30 days and the ordinary tax has been paid.
This is the provision people do not know exists, and it has a hard deadline. Your lawyer needs to be looking at it.
The 365-day rule that can turn your gain into business income
The federal flipped property rule, Income Tax Act section 12(13), defines flipped property to include “a right to acquire a housing unit located in Canada” held for less than 365 consecutive days before disposition.
Where it applies, the gain is “deemed to be business income and not a capital gain”, and the principal residence exemption is unavailable. There are listed exceptions for life events — death, a change in household, relationship breakdown, a threat to safety, illness, relocation, termination of employment, insolvency, and destruction or expropriation.
An assignment is a disposition of exactly the kind of right this rule names. I could not verify the coming-into-force date for that particular branch of the rule, so I am not publishing one — but the existence of the rule is not in doubt and it belongs in the conversation before you sign.
What no official source could tell me
I checked for an Ontario statutory or regulatory requirement governing assignment consent, assignment disclosure, or assignment fees. I found none.
Specifically, the Home Construction Regulatory Authority’s Directive on addenda to agreements of purchase and sale — which does govern closing delays, notice and compensation — contains nothing on assignment. Nor does the HCRA’s own pre-construction buyer guidance, nor Ontario’s general home-buying page.
The honest conclusion: assignment rights, developer consent and assignment fees are contractual terms of the builder’s agreement of purchase and sale. No government or regulator standardises them. Whatever your builder’s agreement says is the deal — which is precisely why it has to be read before you plan an exit.
I also could not verify from CRA who is obliged to collect and remit the tax on an assignment, or whether an assignor must register for GST/HST. Ask your accountant rather than assuming.
Two adjacent facts that are verified
From the HCRA, and worth knowing if you are on the buying side of pre-construction generally: there is a 10-calendar-day cooling-off period under the Condominium Act to cancel with no penalty and a full deposit refund — running only after delivery of the signed agreement with the Condominium Information Sheet, the Disclosure Statement and the Condo Buyers’ Guide. And deposits must be placed in trust, with Tarion protection up to $20,000.
Before you sign either side of an assignment
- Read the builder’s agreement on assignment rights, consent and fees. There is no statutory backstop here.
- Have the assignment agreement address the deposit in writing — whichever way the HST conflict resolves, silence helps nobody.
- Calculate the assignee’s land transfer tax on the full base: original price plus premium plus upgrades. It is frequently the number that kills the deal, and it is knowable in advance.
- Diarise the 30 days under section 3 of the Land Transfer Tax Act.
- Count the days of ownership against the 365-day flipped property rule before you assume capital gains treatment.
Assigning a pre-construction contract, or buying one_
Send me the project, the original purchase price and what you are being asked for. I will tell you how the land transfer tax will actually be calculated on the assignee’s side, what the HST question turns on in your specific agreement, and what I would want the builder’s consent terms to say in writing before anyone signs.
Run your own numbers first: free instant home valuation · condo value estimator · land transfer tax calculator · net proceeds calculator · mortgage calculator. The valuation tool gives you an instant estimate from market data — useful as a starting point, not an appraisal. Here is the difference between the three, and why it matters.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
Is HST payable on an assignment sale in Ontario?
Yes. For supplies made after 6 May 2022, all assignment sales of newly constructed or substantially renovated residential housing are taxable for GST/HST. The previous test, which turned on whether the assignor was a builder by intention, no longer applies.
Is HST payable on the deposit portion of an assignment price?
CRA’s sources conflict. Section 192.1 of the Excise Tax Act and CRA Notice 323 exclude the deposit only where the assignment agreement states in writing that part of the consideration is attributable to reimbursing the deposit. CRA’s Info Sheet GI-120, last revised 7 July 2022, says the full amount including the deposit is taxable. Both are currently published. Take the point to your accountant.
How is land transfer tax calculated on an assignment?
Ontario’s Ministry of Finance states the value of the consideration includes the consideration for the assignment, the purchase price in the agreement assigned, and the value of extras and upgrades. HST is not included, but assigned New Housing Rebates do form part of the value where HST was paid in full and the rebate assigned to the vendor.
What is the 30-day rule on assignments?
Under section 3 of the Land Transfer Tax Act, tax on the disposition of a beneficial interest in land is payable on the 30th day after the disposition, with a return to the Ministry of Finance and a 5 per cent penalty for failure. No section 3 tax is payable if an instrument is registered within 30 days and the ordinary tax has been paid.
Can a builder refuse to allow an assignment?
Assignment rights, consent and fees are contractual terms of the builder’s agreement of purchase and sale. No Ontario government or regulator source reviewed imposes or standardises them – the HCRA directive on addenda and its pre-construction guidance are both silent on assignment. Read the agreement before planning an exit.
Buying pre-construction? Get the agreement reviewed before you sign.
The cooling-off period is short and the builder’s agreement is written for the builder. Send me the paperwork and I will tell you what is negotiable, what the real closing costs come to, and whether the deal makes sense at that price.
Call or text 437-987-1925 Send me the paperwork
Jatin Dua, Sales Representative — RE/MAX Quantum Realty Inc., Brokerage. Not intended to solicit buyers or sellers currently under contract with another brokerage.
Sources
- Canada Revenue Agency — GI-120, Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit. The statement that effective 7 May 2022 all assignment sales of new housing are taxable, and the passages and Example 5 stating that the full amount including the deposit is taxable. Revision date 7 July 2022. Accessed 28 August 2026.
- Canada Revenue Agency — Notice 323, Proposed GST/HST Treatment of Assignment Sales. The statutory formulation that the measure applies to supplies made after 6 May 2022, the written-attribution condition for excluding the deposit, and the warning about the effect on the GST/HST new housing rebate. Date modified 26 May 2022. Accessed 28 August 2026.
- Excise Tax Act, section 192.1 — Justice Laws. New housing assignment of agreement, enacted by 2022, c. 10, s. 52, the application to persons other than the builder, and the consideration formula including the conditional deposit deduction. Page current to 21 June 2026. Accessed 28 August 2026.
- Ontario — Determining the value of the consideration for transfers of new homes. The inclusion of the assignment consideration, the assigned purchase price and extras and upgrades in the value of the consideration, the exclusion of HST, and the treatment of assigned New Housing Rebates. Published 6 April 2022, last updated 8 July 2025. Accessed 28 August 2026.
- Ontario — Land transfer tax and the treatment of unregistered dispositions of a beneficial interest in land. Section 3 tax at section 2 rates, payment on the 30th day after the disposition, the return requirement, the 5 per cent penalty, and the registration-within-30-days relief. Published 6 April 2022, last updated 10 July 2025. Accessed 28 August 2026.
- Income Tax Act, section 12 — Justice Laws. The subsection 12(13) definition of flipped property including a right to acquire a housing unit held less than 365 consecutive days, the deeming of the gain as business income, and the listed life-event exceptions. Page current to 21 June 2026. Accessed 28 August 2026.
- Home Construction Regulatory Authority — Directive on addenda to agreements of purchase and sale. Checked for any assignment consent, disclosure or fee requirement; the directive addresses closing and occupancy delays, notice and compensation, and contains nothing on assignment. Effective 21 February 2021. Accessed 28 August 2026.
- Home Construction Regulatory Authority — Pre-construction condos in Ontario. The 10-calendar-day cooling-off period under the Condominium Act and the conditions on when it starts, and the requirement that deposits be held in trust with Tarion protection up to $20,000. Published 30 October 2025. Accessed 28 August 2026.
Related reading
- Land transfer tax on an Etobicoke purchase, and the two rebates
- Mimico’s unbuilt condos and the Grand Central receivership
- 2150 Lake Shore: what is actually approved on the Christie’s site
- Buying before you sell in Toronto: the Vacant Home Tax trap
About the author — Jatin Dua, Etobicoke real estate agent
I’m a licensed Realtor with RE/MAX Quantum Realty at 799 The Queensway in Etobicoke, a few minutes from every building on this page. I work with buyers, sellers and investors across Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and the Stonegate–Queensway corridor. I write these building guides the way I’d brief a client at my own kitchen table: what is documented, what isn’t, and where the published numbers disagree with each other.
Questions about a specific suite? connect@jatindua.com or 437-987-1925.