Assignment Sales in 2025: Why It’s No Longer the Easy Win Everyone Thinks It Is
Remember when buying a pre-construction home felt like winning the lottery?
People would line up in the middle of the night outside builder offices like it was Black Friday.
Emails flying. Ads shouting. Phones buzzing.
“Office opens at 9 AM - lots won’t last.”
And they didn’t.
Within hours, all the best units were snapped up.
Not by families looking to move in - but by investors planning to flip the contract before it ever closed.
It was the easiest money in real estate.
Until it wasn’t.
Let’s talk about what assignment sales are, why they were once the holy grail of real estate profits - and why they’re now one of the riskiest moves you can make in 2025.
What Is an Assignment Sale?
An assignment sale is when you sell your right to buy a property before it closes.
You’re not selling the house. You’re selling the contract you signed with the builder.
The new buyer (called the “assignee”) agrees to take over your deal.
Same price. Same terms. Same closing date.
They step in, you step out - and ideally, you walk away with a fat profit.
Sounds slick, right?
It used to be.
Why Did People Love Assignment Sales?
Because for years, they worked like magic.
This was the golden era of pre-con.
People were buying townhomes, condos, even detached houses just to flip the contract a year or two later.
Here’s how the playbook looked:
Get in early at builder pricing
Sit back while the market rises during construction
Sell your contract (aka "assignment") to a new buyer for a much higher price
Walk away without ever qualifying for a mortgage, paying closing costs, or even visiting the site
And yes - even my wife and I looked at doing it.
We saw the hype. We ran the numbers. We considered playing the game.
But we held off.
And in hindsight? That was one of the smartest moves we made.
Because here’s what no one tells you:
The game has changed.
If you're running your 2025 strategy on 2017 rules - you’re about to get burned.
Here’s Why Assignment Sales Don’t Work Like They Used To
1. CRA Crashed the Party
Back then, profits were smooth, tax was fuzzy, and no one really cared.
But in May 2022, the CRA turned on the lights at the party.
Suddenly:
All assignment sales are subject to GST/HST
Profits are taxed as business income - not capital gains
Translation?
That $100K you were hoping to walk away with?
13% is gone to HST. Then another chunk to income tax.
If you’re in a high income bracket, you could lose over 40% of your “profit” to taxes - before paying builder fees, legal costs, or realtor commissions. You’re left wondering… what’s left then? Should I just…
Plan to rent it first to try to dodge all that with the CRA?
Maybe, but CRA looks at your intent - not just what you say. If they think you bought to flip, you’re getting taxed like a builder.
Want to learn more? Click here to read about the May 7, 2022 changeup by CRA.
2. Builders Are Blocking You
Most builders now either:
Ban assignments completely
Or charge $5,000 to $10,000 just to let you assign - and control when and how you do it
I mean sheesh, I worked on a client file not long ago that was simply adding his wife to the purchase agreement - and charged him around that to do so. Not even an assignment! Just adding a person DIRECTLY CONNECTED to him. Could you imagine what that looks like for an assignment then?
They might only allow assignments in the last 60 to 90 days before closing.
And you can’t list it on MLS without written permission.
You’re on their timeline - and at their mercy.
And the reason they do this? They don’t want to be burned at closing - they just want to collect their money from the homeowners who are basically a sure thing - instead of the headaches of investors with their complex financial structures and assignment sales. Also, likely doesn’t look good to their board of directors if closings fell apart due to them not having the discretion on assignment sales.
3. Lenders Don’t Like Assignment Deals
Assignment buyers still need full mortgage approval - but it’s not just about income and credit.
Lenders will scrutinize:
The builder
The contract
The construction stage
The appraised value
The buyer’s intent
And most lenders? They don’t want the smoke.
Assignments are rare, risky, and a paperwork nightmare.
Like builders, they want the simplest way to close the deal - and assignment sales are essentially the polar opposite.
4. You Might Not Even Make Money Anymore
In 2020 and 2021, the market went up while your house was being built.
In 2023 to 2025? Not so much.
You could end up trying to sell your contract for less than you paid.
That’s not a flip - that’s a loss.
5. The Buyer Pool Is Tiny
Think about it: who wants to buy an unfinished home they can’t see, with no MLS listing, no warranty coverage until closing, and complex financing?
Answer: almost no one.
The investors are gone.
The flippers are cautious.
And end-users would rather buy a finished house and move in.
That leaves you trying to offload a high-risk deal with no one lined up to take it.
Assignment Sales Aren’t Just Risky - They’re Outdated
I know people who made $100K flipping contracts before drywall was even up.
But that was a different era.
The tax laws were different
The market was rising
Builders were flexible
Lenders weren’t scared
And people were literally fighting over units in a tent outside the sales office
Today?
You’re lucky if anyone shows up - barring the people with genuine interest to buy a home for themselves and their family.
If you’re using yesterday’s strategy to play today’s game - you’re the last person dancing at a party that already ended.
So... What Should You Do?
If you already bought pre-con:
Plan to close
Get your financing in order early
Talk to a broker who understands the risks
Budget for worst-case scenarios, not best-case fantasies
If you’re shopping for pre-con now:
Don’t assume you can assign it later
Only buy what you can close on
Focus on long-term value, not short-term flips
If you're stuck in an assignment deal already?
Book a call.
There are ways to limit damage - but only if you act early.
Final Thoughts
Assignment sales used to be real estate’s golden ticket.
But in 2025, they’re a tax-loaded, builder-controlled, lender-resistant mess.
The CRA is watching
Builders are tightening the screws
Lenders are blocking the exits
And the easy profits? Gone
It might feel like a great opportunity on paper.
But if you're not careful, that paper can become a liability - fast.
Want to know your real options? Let’s talk.
Book a free call
Or send me the details and I’ll run the numbers, no fluff
Smart investors play today’s game - not yesterday’s highlight reel.