What's the Difference Between a Presale and an Assignment?
Both let you buy into a new development before it's finished, but you're buying from different people, under different rules, with a different cost picture.
“• A presale is a purchase directly from the developer, on a contract that completes once the building is finished
• An assignment is buying someone else’s presale contract from them, stepping into their spot before the original completion date
• Assignments often come with a meaningfully different tax and closing cost picture than a straight presale purchase”
Two Ways Into the Same Building
On the North Shore, and across Metro Vancouver generally, new construction gets sold two different ways, and the terms get used almost interchangeably in casual conversation even though the transactions work quite differently.
A presale is the straightforward version: you buy a unit directly from the developer, typically before the building exists or while it's still under construction, based on floor plans and finishes rather than a finished product. Your deposit is staged over the construction period, and the contract completes once the building is finished and the strata is registered. You're the original buyer, and your name goes on the contract from day one.
An assignment is different. Someone else already holds a presale contract, and before that contract completes, they sell their position in it to you. You're not buying from the developer; you're buying the contract itself from the original purchaser, and you step into their place, taking on the remaining obligations (and the eventual completion) as if you'd bought from the developer originally. The building itself might be identical, sometimes the exact same unit, but the transaction and the person you're dealing with are entirely different.
Why Someone Sells an Assignment
People assign presale contracts for a range of reasons that have nothing to do with the building itself: a change in life circumstances, a job relocation, a shift in financing situation, or simply wanting to realize a gain if the market has moved since they signed. Assignment isn't automatically a red flag on the property; it says more about the seller's situation than the building's.
The Developer's Consent Requirement
This is the detail that catches people off guard most often: assignments aren't automatically allowed. Most presale contracts include a clause that requires the developer's written consent before the original buyer can assign, and some developers charge a fee for granting it, often calculated as a percentage of the assignment profit. A number of developers prohibit assignment entirely until the project is substantially sold out, specifically to prevent early buyers from flipping contracts and undercutting the developer's own remaining sales. If you're the one buying an assignment, confirm the assignment clause has actually been satisfied, not just that the seller says it has.
The Cost Picture Is Different
Buying an assignment isn't simply "buying a presale a bit later." The tax and cost structure shifts in ways that catch buyers off guard if they assume it works identically to a straight presale purchase.
On the tax side, an assignment seller's profit can potentially be subject to GST on the assignment premium, BC's home flipping tax if the contract has been held under two years, and federal income tax, since CRA generally treats assignment profit as fully taxable business income rather than a capital gain. These aren't alternative taxes where only one applies; more than one can hit the same transaction. As the buyer, it's worth understanding how these costs are being handled in the deal, since in some structures they get built into the price you're paying rather than being the seller's problem alone.
On the closing cost side, property transfer tax on an assignment is generally calculated on the final purchase price you're paying (which includes any premium above the original contract price), not on the original presale price the first buyer locked in. That can mean a meaningfully different tax bill than the number that first appeared on the original presale contract.
What This Means for You
I tell buyers to treat an assignment purchase with the same care as any resale, plus an extra layer of contract review most people don't expect. Confirm the developer's consent is actually documented, get a clear breakdown of who's responsible for which taxes and fees before you commit, and don't assume the numbers work exactly like a straight presale just because the building is the same. A good conveyancing lawyer earns their fee on this type of transaction more than almost any other.
Looking at a Presale or an Assignment on the North Shore?
If you've found a unit and aren't sure whether it's a presale or an assignment (or what that actually changes for you), send me the details and I'll walk you through what to check before you commit.
604.317.4464
Matt@RossettiRealty.ca
About Matt Council
Matt Council is a top-performing North Vancouver Realtor and West Van specialist with a background in finance. He moves beyond the sales hype to offer clients a data-driven, pressure-free approach to buying and selling real estate on the North Shore. Whether you are evaluating a presale in Lower Lonsdale or a detached home in Lynn Valley, Matt helps you understand the numbers behind the move.
Thinking of making a move? Let’s run the numbers.