Buying a new build on assignment — and the closing extras builders add
Two things blindside new-build buyers. Taking over someone else's purchase agreement is a different transaction from buying from a builder, and since May 2022 every assignment sale of new housing is taxable for GST/HST. And on closing day, adjustments and extras get added to a price you thought was fixed. What to establish before signing either.
By Ottawa Property Guide EditorialPublished August 1, 2026 Last verified August 1, 2026
The new-build journey on this site walks through buying from a builder in the ordinary way. Two variations catch people out, and they are related: buying somebody else's contract rather than the builder's, and discovering on closing day that the price was not the price.
A new build assignment: you are buying a contract, not a house
In an assignment, the original purchaser — who signed with the builder, possibly years ago — transfers their agreement to you before the home is completed and closed. You step into their position. You are not buying a house from them; you are buying their contract with the builder, and you inherit its terms, its deposit schedule and its obligations.
The seller's side of this is set out in selling a new build on assignment. From the buyer's side, four things decide whether it works.
Does the builder permit assignment at all, and on what terms? Many agreements restrict it, require consent, and charge a fee. The builder's consent is not a formality and it is not yours to assume.
What exactly are you taking on? The original price, the deposit already paid, the closing date, the unit as configured, and every decision the original purchaser made at the design studio. You are not choosing those.
What are you paying the assignor on top? Typically their deposit back plus whatever the contract has appreciated by. That amount is due to them, usually well before the home closes.
Who holds what, and when? Assignment deals have their own money flow, and it is not the ordinary resale pattern.
HST on assignment: the rule that changed in 2022
This is the one that produces unexpected five-figure bills, and it is stated plainly by the Canada Revenue Agency:
Effective May 7, 2022, all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable for GST/HST purposes.
Canada Revenue Agency, GI-120
All of them — including assignments by ordinary individuals, which previously could fall outside the tax depending on the assignor's intention. The amount attributable to the deposit the assignor paid the builder is excluded from the consideration, subject to conditions, but the rest of what you pay them is taxable.
There is a second consequence people miss. The new housing rebate is calculated on the total consideration for the home, which includes a taxable assignment. So an assignment can change the rebate arithmetic as well as adding tax. Take that to an accountant before you sign, because it is the difference between a deal working and not.
Rebate eligibility generally turns on intending to occupy the home. If you are buying an assignment to rent it out, the rebate you were counting on may not be the one that applies — the rental version is a different claim with different rules, and the general shape of the tax on an investment purchase is in buying an investment property in Ottawa.
Closing adjustments and builder extras — and asking for capped adjustments
This is the other new-build surprise, and it applies whether you bought from the builder or by assignment. The purchase price in the agreement is not the amount you pay on closing. A builder's agreement typically allows a series of adjustments to be added, and they can total a great deal.
What tends to appear:
Development charges and municipal levies, often passed through to the buyer — and frequently the largest single item.
Utility connection and meter installation charges for hydro, gas and water.
Tarion enrolment fee, the new-home warranty registration.
Law society, registration and administration charges the builder is permitted to add.
Grading or landscaping deposits, sometimes refundable later, sometimes not.
HST adjustments, including where a rebate assumed in the price turns out not to apply to you.
Occupancy or interim closing costs on a condominium — a separate subject covered in new build occupancy.
The single most useful thing a buyer can do about this is ask, before signing, whether the agreement caps the adjustments. Many buyers successfully negotiate a cap on development charges and levies, and a capped agreement and an uncapped one are materially different purchases at the same headline price.
Before you sign either one
Have a lawyer read the agreement you are stepping into, in full, before you commit to an assignment.
Confirm the builder consents, on what terms and for what fee.
Get the GST/HST position in writing from an accountant — the tax on the assignment and the effect on any new housing rebate.
Establish what you owe the assignor and when, which is often long before the home closes.
Ask whether closing adjustments are capped, and get an estimate in writing either way.
Check what design and upgrade decisions you are inheriting — see new build upgrades for what those cost and what they return.
Confirm your financing works on this structure. Not every lender treats an assignment the same way, and finding out late is the common failure.
Assignments are a legitimate way to buy and plenty complete without incident. They are simply a contract transaction wearing a house's clothes, and the people who get hurt are the ones who priced the house and never read the contract.
Life changes faster than construction schedules. If you've signed with a builder and need out before closing, an assignment sale — selling your purchase contract rather than the home — may be possible. It runs through the builder's consent, careful tax treatment, and paperwork that punishes improvisation. If you need to assign my contract before closing, this is what a preconstruction assignment involves — and why flipping a new build is taxed differently from selling a home.
A new-build deposit is bigger than a resale one, paid in stages over months, and handed to a builder long before there is a house. What stands behind that money depends on whether you are buying freehold or condominium — and since April 2026, partly on whether you filed one form. How staged deposits are scheduled, what Tarion deposit protection actually covers, and the deposit vs down payment distinction that catches most first-time buyers.
Condominium buyers can move in months before they own the unit, paying a monthly fee that buys them nothing. Freehold buyers get possession and ownership on the same day — but either way the date can move, twice, by a lot. Here is how occupancy actually works and what you are owed when it slips. What happens if the closing date moved, how delayed occupancy is handled, and why occupancy day and closing day are two different days on a condominium.
Buying preconstruction is a different transaction from buying resale: the builder agreement is the builder's own paper, the home doesn't exist yet, and the timeline is measured in seasons. New vs resale, and the whole journey in the buyer's order.
July 22, 2026
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