Purchasing a new development or presale property in British Columbia can be an excellent way to secure modern housing, customize finishes, and enter the market with a phased deposit structure. However, presale contracts are fundamentally different from resale agreements, and buyers must understand consumer protections under provincial legislation—including disclosure obligations, rescission rights, timelines, and financial considerations.
This guide provides a clear, practical overview of how presales work in B.C., helping buyers make confident, well-informed decisions.
What Is a Presale in British Columbia?
A presale occurs when a buyer signs a contract for a home that is not yet built or still under construction. Presales are common in condominium towers, townhouse developments, and master-planned communities throughout Metro Vancouver, North Vancouver, Burnaby, Richmond, Surrey, and the Fraser Valley.
Key characteristics of presales:
- Buyers typically pay deposits in stages
- Completion may occur 1–3 years after contract signing (sometimes longer)
- Buyers may select layouts or finishes
- Final mortgage approval occurs closer to completion
Presales offer convenience, long-term planning ability, and potential for appreciation, but also introduce market and financing risks.
Disclosure Statements and Consumer Protection (REDMA)
Presales in B.C. are governed by the Real Estate Development Marketing Act (REDMA). This legislation ensures buyers receive transparent information before committing to the purchase.
Developer Disclosure Statement
Developers must provide buyers with a comprehensive Disclosure Statement, which includes:
- Full development plans and construction details
- Floorplans, unit specifications, and amenity descriptions
- Estimated completion dates and phasing
- Developer history and corporate structure
- Budget and projected strata fees
- Bylaws and initial strata governance framework
- Environmental considerations and material facts
- Parking, storage, and shared facility information
Buyers should read the entire document and seek legal review. The disclosure statement forms the foundation of the presale agreement.
Material Changes and Amendments
If a developer makes a material change, they must notify buyers. Depending on the significance of the change, buyers may regain rescission rights.
The Seven-Day Rescission (Cooling-Off) Period
B.C. law provides buyers with a 7-day rescission period after signing a presale contract. During this time, buyers can cancel for any reason without penalty, and deposits must be returned.
This period allows buyers to:
- Review the disclosure statement in depth
- Obtain independent legal advice
- Confirm mortgage pre-approval
- Assess long-term suitability
The cooling-off period is one of the strongest consumer protections in the B.C. presale system.
Deposit Structure in Presales
Deposits are often paid in multiple stages, commonly:
- 5% at contract signing
- 5% at 90 days
- 5% at 180 days
- Additional deposits at building permit or construction milestones
Deposits are normally held in a lawyer’s trust account or under a legislated financial security arrangement.
GST on New Homes and Presales
GST (5%) applies to most presale purchases. Buyers should confirm whether GST is included in the advertised price or payable at completion. Eligibility for New Housing GST Rebates should be reviewed with a tax professional.
Completion, Mortgage Approval, and Occupancy
Completion Day
This is when title formally transfers and the balance of funds is paid. Mortgage approval is finalized shortly before this date.
Interim Occupancy (Strata Projects)
Some strata developments allow occupancy before title registration, during which buyers pay an occupancy fee. This period does not build equity, and buyers should understand their contractual obligations.
Benefits of Buying Presale
- Enter the market with staged deposits
- Access brand-new construction
- Flexibility to plan a future move
- Opportunity to select layouts and finishes
- Potential appreciation during construction period
Presales can be especially appealing for buyers with long-term horizons and stable income.
Risks and Important Considerations
Presales carry unique risks requiring careful evaluation.
Market Changes
Property values may fluctuate by completion.
Interest Rate Movements
Rising rates may affect affordability when the mortgage is finalized.
Construction Delays
Projects may be delayed due to permitting, labour shortages, or supply chain issues.
Estimated Strata Fees
Initial budgets are estimates only; fees may rise after occupancy.
Assignment Restrictions
Not all presale contracts permit assignments, and restrictions or fees may apply.
Professional legal and mortgage advice is strongly recommended throughout the process.
Case Study: Presale Condominium in Richmond
A buyer secures a presale condo in Richmond and pays deposits over 12 months. During construction, interest rates rise, impacting qualification. Because the buyer planned conservatively, maintained strong credit, and stayed in regular contact with their mortgage advisor, they successfully completed the purchase.
Their preparation illustrates why buyers should plan early and review financing multiple times before completion.
Frequently Asked Questions
Do presales always increase in value before completion?
No. Market cycles fluctuate. Some presales appreciate; others do not. Presales are best suited for long-term owners, not short-term speculation.
Can I exit after the rescission period?
Only if the contract allows assignment or if a legal basis exists. Many developers impose assignment restrictions or fees. Legal advice is essential before pursuing assignment strategies.
How accurate are estimated completion dates?
Completion dates are projections. Large projects often experience schedule shifts. Buyers should build flexibility into moving and financing plans.
Do I need mortgage approval before signing a presale?
A pre-approval is recommended, but final approval occurs closer to completion. Buyers must be prepared for rate or qualification changes.
Are deposits secure?
Yes. Deposits are typically held in trust, subject to strict regulations under REDMA.
Should I have a lawyer review a presale contract?
Absolutely. Presale contracts are lengthy and developer-friendly. Legal review helps buyers understand obligations, timelines, and risks.
Are presales suitable for investors?
Presales can work for investors with strong financial capacity and long-term plans. Tax implications—including GST and potential assignment taxation—should be reviewed with an accountant.
Helpful Resources
- Real Estate Development Marketing Act (REDMA)
https://www.bclaws.gov.bc.ca/ - BC Financial Services Authority
https://www.bcfsa.ca/ - Government of Canada – GST New Housing Rebate
https://www.canada.ca/
Important Note
This information is provided as a general guide. It does not replace individualized legal, accounting, or mortgage advice. Individuals should consult their professional advisors before making real estate decisions.