We often see a parent creating joint ownership with an adult child on title of their property in an attempt to avoid the Estate Administration Tax (“EAT”). This could be the worst mistake for your estate plan! Not only it may not avoid EAT, it could end up costing you and your adult child a lot more than 1.5% of potential savings.
Did you know that you may have to pay income tax and deal with additional CRA reporting even if you do not sell your home? You should review possible implications with your legal and tax professionals before not only buying or selling a property, but especially if you are considering renting or transferring it to a family member.
The family home is the biggest financial investment for most people. Timing and structuring of the transaction are often driven by personal preferences rather than the understanding of certain intricacies surrounding the entire process. We closed hundreds of real estate transactions for our clients.