What is presale vs resale?

A presale building is a brand new build, where the homes are being sold by the developer building the property. Units can be sold before the development has started construction, during construction, as well as after construction has completed. For resale properties, the home has already been built and is being resold by the current owner has most likely been lived in or is being lived in.

What is the typical deposit for a presale? 

The deposits are set by the developer, and are often between 10-20% set to be paid over a period of time. Depending on incentives, we’ve seen as low as 5% and as high as 25%. 

When do you pay out on a presale? 

After you’ve paid your required deposits, you don’t pay anything else until completion. Any remaining down payment you want to put towards the purchase and closing costs would be due at that time. This provides you time to save as typically presale completions are 2-5 years away.

How do the taxes differ on presales?

For presales it’s important to know that on top of your property transfer tax, you have an additional 5% GST that applies on the purchase price.

Are there any property transfer tax exemptions for presales?

Yes! There is a ‘Newly Built Home’ property transfer tax exemption that applies to presale properties. To be eligible when purchasing newly built homes (i.e. presale properties) the following requirements need to be met:

• The buyer must be a Canadian Citizen or PR
• The buyer must be using the home as a Primary Residence
• Purchase price for the home must be under $1,100,000
• The buyer does NOT have to be a first time buyer, you can be a repeat buyer

What is an assignment? 

An assignment of contract in real estate is a transaction of a home in which the buyer of the property “assigns” or transfers their rights and obligations of the Agreement of Purchase and Sale previously agreed to another buyer before the original buyer closes on the property. In this case, because completion has not occurred, they are not the legal owner for the property yet, thus they require consent from either the seller or the developer (often times the developer).

This can occur in both resale and presale homes; however, assignments are most commonly found in presales where there is a longer closing, often 5 years away.