Are you hearing more about assignment sales around Brantford and wondering if they make sense for you? If you bought a pre-construction home or condo and your plans changed, or you are trying to get into a sold-out community, an assignment could be a smart path. The rules, fees, financing, and taxes are different from a regular resale, so a clear roadmap helps. In this guide, you’ll learn how assignments work in Brantford, what they cost, key risks, and the steps to protect your interests. Let’s dive in.
What an assignment sale is
An assignment sale is the transfer of your purchase contract for a new build to another buyer before the builder’s final closing. The original buyer is the assignor. The incoming buyer is the assignee. The builder or developer remains the vendor under the original agreement.
The assignor transfers both rights and obligations, subject to the contract’s assignment clause and the builder’s written consent. The assignee steps into the contract, often taking over remaining deposits and closing duties once the home is ready.
When assignments make sense
Investors may assign to lock in profit without waiting for construction to finish. End-users may assign to secure a unit in a community that sold out or to match timing needs. In Brantford and the County of Brant, growing low-rise and townhouse projects and some condos create assignment opportunities tied to local timelines and builder policies.
Assignments can happen soon after signing, during construction, or closer to occupancy. Your timing should consider market conditions, deposit schedules, and the builder’s rules.
How assignments work
Assignments live inside the pre-construction timeline. You sign the original purchase agreement and pay deposits. During construction or before registration, you sell your contract to an assignee. The assignee then closes with the builder at final registration.
Step-by-step process
- Negotiate price and terms between assignor and assignee, including who pays any builder consent fee.
- Have a real-estate lawyer prepare the assignment agreement and coordinate with the builder.
- Obtain written builder consent, meet any conditions, and pay required fees.
- Arrange assignment premium payments and deposit transfers through lawyers’ trust accounts.
- The assignee secures financing, satisfies lender conditions, and prepares for final closing per the builder’s schedule.
Fees and costs to expect
Builders often charge an assignment or consent fee, which can be a fixed amount or a percentage, depending on the contract. These fees and conditions vary by project. Confirm the requirement early.
The assignment premium is any price difference between the original purchase and the new agreed price. You also need to budget for legal fees on both sides and any lender-related costs. Check for any warranty administration or transfer items so coverage continues smoothly.
Taxes, LTT, and warranty basics
Tax treatment of the assignment premium can be complex. Depending on the nature of the transaction, GST/HST may apply to the premium, and profits may be taxed as business income or a capital gain based on intent and frequency. It is important to review your situation with a CPA or tax lawyer.
Land transfer tax is typically due from the assignee when title transfers at final closing. First-time buyer rebates and other provincial rules are applied at that time. Tarion new home warranty coverage usually continues for the new owner, but confirm with the builder and your lawyer how warranty registration will be handled.
Financing factors for assignees
Lenders differ on assignment purchases. Some will not finance the premium, some require a higher down payment, and many apply stricter conditions. Get lender guidance early so your financing aligns with the builder’s closing schedule. A mortgage professional can help you understand options and timing.
Due diligence for assignors
If you plan to sell your contract, set yourself up for a smooth transfer:
- Review your purchase agreement: Confirm assignment rights, any wait periods, and consent or fee requirements.
- Confirm builder consent: Get written confirmation of fees, deposit handling, and any documents the assignee must sign.
- Consult professionals: Engage a real-estate lawyer and a tax advisor to confirm legal and tax impacts.
- Verify the assignee’s financing: Ask for evidence of lender pre-approval or capacity to close.
- Clarify funds flow: Use escrowed payments through lawyers’ trust accounts for the premium and deposit transfers.
Due diligence for assignees
If you are buying an assigned contract, look closely at the fine print:
- Inspect the original agreement: Confirm unit type, plans, upgrades, parking or locker, and inclusions.
- Get builder sign-off: Ensure the builder consents in writing and states how remaining deposits will be handled.
- Check timelines: Request current construction status and any revised occupancy or closing dates.
- Confirm financing: Verify your lender will fund an assignment and on what terms.
- Legal review: Have your lawyer confirm closing costs, land transfer tax, and warranty details.
- Post-occupancy costs: Ask about common element fees or interim occupancy charges if applicable.
Red flags to avoid
Watch for issues that can derail your deal or change the math:
- Builder prohibits assignments or charges excessive consent fees.
- No written confirmation of deposit handling or warranty transfer.
- Unclear premium payment process without escrow or lawyer oversight.
- Lender unwilling to fund the purchase or restricts financing of the premium.
- Significant construction or registration delays that affect carrying costs and pricing.
- Assignor with frequent assignment history that may trigger business income treatment for taxes.
Local timing and market notes
Brantford and Brant continue to attract new builds due to relative affordability and commuter access. That local growth brings variety in builder policies and municipal timelines. Development charges, permit timing, and staging can influence when a project closes, which affects when an assignment is possible and how it pencils out.
For both buyers and sellers, the key is to confirm the builder’s rules early, check the project’s current status, and match your financing and tax planning to the expected closing window.
Move forward with confidence
An assignment can help you unlock value or secure the right home, but the details matter. Focus on three essentials: get written builder consent, confirm tax and lender implications early, and route all payments through your lawyer. With the right team in place, you can move with clarity and control.
If you want local guidance on assignment opportunities or how to prepare your contract for market, reach out to Linda and the LF Real Estate Group for a personal, results-driven plan. Schedule your consultation with Linda Fernandes Real Estate to get started.
FAQs
What is an assignment sale in Ontario?
- It is the transfer of a buyer’s pre-construction purchase agreement to a new buyer before final closing with the builder.
How do builder consent and fees work in Brantford?
- Builders set their own policies; many require written consent and may charge a fixed or percentage-based assignment fee.
Who pays the assignment premium and related taxes?
- The premium is negotiated between parties, and tax treatment varies; consult a CPA to confirm HST and income vs. capital gain outcomes.
Will my lender finance an assignment purchase?
- Some lenders do, some do not, and many will not finance the premium; confirm terms with your lender early.
Does Tarion warranty transfer to the assignee?
- Warranty coverage typically continues for the new owner, but confirm the transfer process with the builder and your lawyer.
When is land transfer tax paid on an assignment?
- The assignee usually pays land transfer tax at final closing when title transfers to their name.
