ImmoMulti — a direct buyer of income properties on the North Shore — breaks down a strategy that appeals to investors: the assignment of contract (in French, cession de contrat). The idea is to resell your right to buy a property before closing, without ever becoming the owner, and pocket a profit on the assignment price. Attractive on paper, but tightly framed by conditions (assignment clause, seller consent) and by unforgiving tax rules: according to the Canada Revenue Agency and Revenu Québec, this profit is generally fully taxable business income — not a capital gain taxed at 50% — and GST/QST may be added on top. This guide is for the investor considering the move and for the plex owner who wants to understand who they are really selling to.
What is the assignment of a purchase promise?
An assignment of contract means transferring your right to buy a property to a third party before closing. The original buyer (the assignor) never becomes the owner: they resell their contractual right to the assignee, who buys directly from the seller at the notary — usually for an assignment price that is the assignor's profit.
The assignment of contract is a legal operation whereby the original buyer of a property, the assignor, transfers to a third party, the assignee, their right to buy that property. The key feature: the assignor never becomes the owner. They sign the purchase promise, then, before closing at the notary, they simply resell the right to acquire the property.
In concrete terms, if an investor signs a purchase promise on a triplex at $600,000 and the market rises, they can assign their right to another buyer for, say, $630,000. The assignee pays $600,000 to the seller (the originally agreed price) and $30,000 to the assignor: that is the assignment price, the profit on the deal. The seller receives exactly what was agreed.
This mechanism rests on the assignment of contract set out in the Civil Code of Québec. It is common in pre-construction and on income properties whose value can climb between signing and closing. But it is never automatic: without the right clauses, it is simply impossible.
Source: OACIQ — The Promise to Purchase.
What conditions allow you to assign a purchase promise?
The assignment is only valid if the purchase promise contains an explicit assignment clause, or if the seller consents. Most forms target a named buyer: without an assignment clause negotiated from the outset, substituting another buyer can constitute a default.
The first condition is contractual. A standard purchase promise binds a specifically named buyer. To assign it, the contract must expressly provide an assignment clause — sometimes phrased as "X and/or assigns." Without this clause, trying to introduce another buyer amounts to changing an essential term of the contract.
Seller consent: the tipping point
The second condition, absent a clause, is the seller's consent. The seller has a legitimate interest in knowing who they are selling to: ability to pay, financing, the assignee's seriousness. Many sellers — and their brokers — refuse an assignment that was not planned, or accept it only with guarantees. That is why the assignment clause must be negotiated at signing, never afterward.
Before signing an assignable promise
- Have a clear assignment clause ("or assigns") drafted by a notary or broker
- Check whether the seller accepts assignment or requires written consent
- Set out who remains liable if the assignee defaults before closing
- Document in writing the assignment price and the handover of documents (leases, inspection, financing)
Is the profit from a contract assignment taxable in Québec?
Yes, and often at 100%. According to the Canada Revenue Agency, profit from buying real estate to resell for a gain — including through assignment — is generally fully taxable business income, not a capital gain taxed at 50%. In Québec, selling a right to acquire held under 365 days falls under the flipping (revente précipitée) rule.
This is the point investors most often misunderstand. Many assume an assignment profit will be taxed as a capital gain (only part of which is taxable). But the Canada Revenue Agency is clear: when real estate is bought with the intention of reselling it for a profit, that profit is generally fully taxable business income. The CRA specifically includes assignment sales in this category.
Source: Canada Revenue Agency — Tax effects of buying real estate to sell for a profit.
The flipping rule (Revenu Québec)
Québec adds an explicit layer. Since January 1, 2023, the flipping rule (revente précipitée) deems a resale "precipitated" when an owner sells, before 365 consecutive days of ownership, a residential property — including a rental property or a right to acquire such a property — with no qualifying life event to justify it. The profit then becomes fully taxable business income. A speculative assignment of a purchase promise falls squarely within this target.
Long holding guarantees nothing
Even beyond 365 days, a profit may be found fully taxable as business income. Whether income is business income or a capital gain remains a question of fact that depends, among other things, on the intention to keep or resell. For a contract assignment, the intention to resell is hard to deny.
Source: Revenu Québec — Flipping of your property (house or residential property).
Do GST and QST apply to the assignment of a contract?
They may apply. The Canada Revenue Agency proposed making all assignment sales of a newly constructed or substantially renovated residential unit taxable. The tax then applies to the consideration for the assignment. Because treatment varies with the nature of the property, GST/QST status must be validated and declared in the purchase promise.
Indirect tax is the second trap. Assigning a purchase promise is not neutral for sales taxes. The Canada Revenue Agency proposed making all assignment sales of a newly constructed or substantially renovated residential unit — including a residential condominium unit — taxable. In those cases, the GST/HST — and, in parallel, the QST — applies to the consideration paid for the assignment, that is, the assignment price itself.
For an existing, already-occupied income property, the treatment differs and depends on the nature of the property. That is why every purchase promise form must declare whether the property is subject to GST and QST, and in what proportion. An oversight here can turn an anticipated profit into a net loss once the tax is claimed.
Sources: Canada Revenue Agency — Notice 323: Proposed GST/HST Treatment of Assignment Sales; OACIQ — Residential immovable: subject or not to GST and QST.
What are the risks of assigning a plex purchase promise?
Main risks: no assignment clause and a seller who refuses; an assignee who fails to obtain financing and defaults, leaving the assignor liable; a tax reclassification of the profit as business income; unforeseen GST/QST; and loss of the deposit if closing fails.
A contract assignment concentrates several risks the hurried investor underestimates. The first is legal: without an assignment clause, the move is blocked, and an unhappy seller can invoke a default. The second is counterparty risk: if the assignee fails to secure financing and defaults at closing, the assignor often remains liable to the seller until the sale is completed. They may then have to buy the property themselves — or lose their deposit.
The third is tax, as above: reclassification into fully taxable business income and possible GST/QST on the assignment price. The fourth concerns transparency: the assignor must hand over all documents (leases in place, inspection, financing conditions). On a plex with leases, a latent defect or a poorly documented rent can come back to bite them.
| Risk | Consequence for the assignor | Safeguard |
|---|---|---|
| No assignment clause | Assignment impossible; seller refusal | Negotiate the clause at signing |
| Assignee default | Liability maintained toward the seller | Verify financing; substitution clause |
| Tax reclassification | Profit 100% taxable (business income) | Validate with a tax specialist; compute net tax |
| GST/QST on the assignment | Tax on the assignment price | Declare tax status in the promise |
"The profit realized on the resale is considered fully taxable business income."
— Revenu Québec, on the flipping of a right to acquire a property (rule in effect since January 1, 2023)Assignment or direct sale: what to do with your North Shore plex?
Assignment is an investor-buyer strategy, not a seller-owner one. If you already own your plex, you are not assigning a promise — you are selling the building. A direct sale to a specialized buyer avoids the chain of uncertainty of an assignment and delivers a firm price quickly.
Two positions must be distinguished. That of the investor who has signed a purchase promise and seeks to resell it before closing — they are the one handling the assignment, with all the risks described. And that of the plex owner who already owns their North Shore income property: they assign nothing, they sell their building, with its leases and its capital-gains tax treatment (and not business income, in most long-holding cases).
For the seller-owner, a contract assignment brings no advantage: it adds intermediaries, conditions and uncertainty. Conversely, a direct sale to a specialized buyer like ImmoMulti offers a firm price within 48 hours, with no broker, no commission, no public listing and no assignment chain that could collapse if one link defaults.
ImmoMulti: direct buyer of income properties on the North Shore
You own a plex in Terrebonne, Blainville, Boisbriand or Saint-Eustache and you are considering selling? We make a direct, confidential offer, with no commission and no intermediary. Get a proposal within 48 hours.
To dig deeper into the tax side of your sale, see our guide on capital gains on the sale of your plex in 2026, along with our analysis of the anti-flipping rule: reselling a plex within 12 months. And if you are still preparing your transaction, revisit the purchase-promise clauses that protect the seller.
Informational content only. Does not constitute tax or legal advice. Tax treatment of assignments depends on the nature of the property and your situation. Consult a notary or tax specialist for advice specific to your transaction.