Since May 2022, GST applies to assignment sales of new residential property in Canada — including where the assignor is an ordinary individual rather than a builder. The 5% is charged on the assignment amount, meaning the premium above the original purchase price, not on the entire contract price. That distinction is worth thousands and is regularly misunderstood on both sides of a deal.
Who pays is a negotiable deal point. In most assignment contracts we draft, the buyer pays the GST on the assignment amount, but it can be structured differently and should be stated explicitly rather than assumed. An assignment contract that is silent on GST is a dispute waiting to happen.
This is separate from the GST on the home itself, which applies at completion on the purchase of new residential property and may be reduced by the new housing rebate depending on price and how the property will be used. Two different GST events, commonly conflated.
For sellers, the reporting obligation is the part that causes trouble. Assignment profit is generally treated by CRA as business income — fully taxable — rather than a capital gain, unless you can demonstrate you intended to live in the home. If the contract was held for less than twelve months, the federal anti-flipping rule generally deems it business income automatically, with no principal residence exemption. The BC home flipping tax can also apply to gains on a presale contract sold within 730 days.
We are not accountants and we will not pretend otherwise. What we will do is flag the exposure before you accept an offer and tell you to get a CPA who does BC real estate — that call costs a fraction of the surprise.
This is general information, not legal or tax advice. Assignment tax treatment in particular is unforgiving, and we will tell you to speak to a CPA before you accept an offer.
Yes. Since May 2022, GST applies to assignment sales of new residential property, including assignments by individuals. It is charged at 5% on the assignment amount — the premium over the original purchase price — not on the full contract price.
It is negotiable and should be stated explicitly in the assignment contract. In many assignment contracts the buyer pays the GST on the assignment amount, but this is a deal term rather than a rule.
CRA generally treats assignment profit as business income, fully taxable, rather than a capital gain, unless you can show you intended to occupy the home. Contracts held under twelve months are generally deemed business income under the federal anti-flipping rule.
It can apply to gains on a presale contract sold within 730 days, and assignments do not receive a principal residence exemption in the way an owner-occupied resale might. Confirm your specific position with a CPA.
Yes. Assignors are required to report the sale, and failing to do so can lead to significant penalties. Your accountant handles the filing.
Talk to a buyer-side presale specialist: (672) 258-1100. Free contract review and valuation — we don't work for the developer.