Pre-Sales

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 It is my understanding that if A sells to B at a profit prior to possession, then CRA treats it as inventory, not real estate, and taxes it as ordinary income, rather than capital gains.

That can be a major disadvantage for the owner who actually takes possession if only the original owner is exempt from future rental restriction bylaws under the SPA. Particularly if the assignments circled back to the developer to resell, so the owner thinks that they are the original purchaser, when they actually aren't.

If the completion date on the contract of purchase and sale is a year or two before an occupancy permit is issued, then I wonder if the owner might be responsible for strata fees, insurance, or loss from fire, vandalism, injury, etc. in the interim...

Caveat emptor!

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