Pre-Construction and Assignment Sales: What Agents Need to Know

Pre-construction looks like resale with a longer closing date. It is not. The contract, the deposit structure, the tax treatment, and the exit options are all different, and agents who treat it as resale get clients into trouble.

The deposit schedule is the product

A typical pre-construction condo asks for a staged deposit — often around twenty percent spread across the first year or two, with the balance on final closing. That structure is why pre-construction attracts buyers who cannot yet qualify for a full mortgage but can save steadily. It is also why a buyer who misses a deposit date is in real jeopardy.

Interim occupancy is not ownership

Between occupancy and final closing, the buyer lives in the unit and pays an occupancy fee to the builder that covers interest, taxes, and maintenance. None of it pays down principal. Clients regularly misunderstand this as "paying the mortgage early" and are unpleasantly surprised.

Assignments have rules

An assignment sells the contract rather than the unit. Most builders restrict it: written consent, an assignment fee, a cap on how many, and often a ban on public marketing before a certain sales threshold. Never advertise an assignment publicly without confirming the builder's agreement permits it.

Tax is where deals go wrong

HST treatment on new construction and on assignment profits is materially different from resale, and CRA has increased scrutiny on assignments. Send clients to an accountant early — not after the offer.

Marketing it online

Pre-construction buyers research far ahead of buying. A project page with floor plans, deposit schedule, and a registration form captures them at the research stage, months before a sales centre would.

AgentsWise lets you build custom project and landing pages alongside your IDX listings. See the features.