Presale Assignment Clause Vancouver — What It Means | Matt Brevner
Assignment Clauses in Vancouver Presale: What They Are and Why They Matter
The assignment clause is where a lot of Vancouver presale investors make their money — or leave it on the table. Here's what it means and what to look for before you sign.
What Is an Assignment?
An assignment is when you sell your presale contract to someone else before the building is completed. You become the "assignor." The new buyer becomes the "assignee." They take over your contract — same price, same terms — and pay you whatever premium the market has created since you originally bought.
Example: You buy a presale unit in 2024 for $500,000. By 2026, before the building completes, comparable units are worth $600,000. You assign your contract for $600,000. You pocket $100,000 (minus taxes and fees) without ever taking possession. That's assignment investing.
Why 0% Assignment Fee Is a Big Deal
Most developers charge a fee to allow assignments. Typical range: 1-3% of the original purchase price. On a $500K unit, that's $5,000-$15,000 straight to the developer for the privilege of selling your contract.
When a project offers 0% assignment (plus a small admin fee), that's meaningfully better for investors. It keeps your exit options maximally open. BUTE at Clayton Crest, for example, offers 0% assignment with a $1,000 admin fee — well below market rate.
Assignment Tax — The Part Nobody Talks About
Assignment profits in Canada are generally treated as business income, not capital gains. That means you could be paying 100% of your marginal tax rate on the profit (vs. 50% for capital gains). The CRA has been increasingly aggressive about this, particularly for Vancouver and Toronto presale markets. Model your assignment profit on an after-tax basis before making buy decisions.
Assignment Clause FAQ
What is an assignment clause in a BC presale?
An assignment clause allows the original buyer to sell (assign) their presale contract to a new buyer before the building completes. The assignee takes over all rights and obligations of the original contract. The original buyer (assignor) typically keeps any profit above the original purchase price.
What is a typical assignment fee in Vancouver?
Assignment fees typically range from 0% to 5% of the original purchase price, charged by the developer. Some developers also charge an administrative fee ($500-$2,500). Zero-percent assignment fees (with only a small admin fee) are considered highly favourable for investors.
Is assignment income taxable in BC?
Yes. Assignment profit is taxable income in Canada. In most cases, it is treated as business income (not capital gains) because the transaction occurs before you have ever occupied the property. Consult a tax professional before assigning a presale contract.
Can all Vancouver presale contracts be assigned?
No. Some developers prohibit assignment entirely or restrict it to specific circumstances (e.g., family transfers only). Always check the assignment clause before buying if you want the option to assign.
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