What if I sign a contract to purchase a pre-sold strata unit, but then assign that right to someone else who takes title to the property?
If the transfer of a pre-sold strata unit is a non-arm’s length transaction, but the transferee is a related individual of the person who signed the contract, there is no change in the tax treatment and the pre-sold provisions still apply. “Related individual” is defined under the Act to include spouses or those “vertically related” to each other, such as a mother, father, grandmother, grandfather, child, mother-in-law, grandfather-in-law, etc. It does not include brothers and sisters. If the parties are not considered related, the transferee must pay tax based on the total consideration that would have been paid for the unit if the transaction had been between arm’s length parties in the open market. The administrator can determine this amount for any non-arm’s length transfer. An assignment of the right to purchase a pre-sold strata unit from the purchaser to their company is an example of a non-arm’s length transaction.
