In Canada, family law plays a crucial role in property ownership and transfer, especially within families or close relationships. As individuals approach important life stages, such as estate planning or transferring property to the next generation, understanding the implications of family law is paramount.

Family Property Transfers

“Family transfers” involve the movement of property among family members or closely associated individuals. Often, these transfers are strategic elements of estate planning, particularly when a family member wishes to add a spouse or child to the property title during their lifetime. This approach can streamline the transfer of property outside of probate, saving considerable expenses associated with estate settlement.

It’s crucial to approach family transfers with caution, as seemingly straightforward transactions can have significant implications on the transferor’s rights and benefits. Seeking advice from an accountant or lawyer is advisable to ensure that the process doesn’t incur unexpected taxes or obligations.

Ways of Transferring Properties:

If you’re contemplating transferring your home to your child, several options exist, each with its own set of considerations.

  1. Sell Your Home to Your Child:
  • Sell the property at fair market value.
  • Consider tax consequences and seek professional advice.
  1. Gift Your Property:
  • Use a revocable living trust for flexibility.
  • Beware of CRA regulations on large gifts and their potential tax implications.
  1. Bequeath Your Property:
  • Set up a trust with a clear distribution plan.
  • Seek professional assistance in trust establishment.
  1. Deed/Title Transfer:
  • Transfer property ownership as you would to anyone else.
  • Consider potential land transfer taxes.

Avoiding Attribution Rules:

When gifting a family home to a child, it’s crucial to navigate attribution rules to minimize taxes. Strategies include making gifts to adult children, facilitating deductible contributions to RRSPs, or depositing child benefits into accounts or RESPs.

Understanding the attribution rules is pivotal when transferring property between spouses. While default attribution rules may apply to below fair market value transfers, spouses can elect for alternative treatments. The rationale behind these rules is to maintain consistency in beneficial ownership, ensuring no immediate tax consequences when spouses exchange property.

Canada: The Peril of Family Asset Transfers:

Transferring assets between family members might seem routine, but it comes with potential tax pitfalls. Sections 160(1) and 325(1) of the Income Tax Act as powerful tools to prevent tax debtors from impoverishing themselves artificially. It’s essential to be aware of these provisions to avoid unintended tax consequences.

Transfer Ownership of House to Family Member in Canada:

Transferring property between parent and child in Canada requires careful consideration. Potential pitfalls include income attribution, double taxation for below fair market value sales, capital gains taxes, and the importance of principal residence exemptions. Seeking professional advice is crucial to navigate these complexities.

 Estate Planning to Transfer Real Estate Portfolio to Children:

For those considering transferring real estate to their children as part of estate planning, various options exist, including revocable living trusts. While no option is entirely tax-free, the goal is to minimize the tax burden on heirs. Hiring a property management company can facilitate the transition and ongoing management of real estate assets.


a.) Can You Gift Property to a Family Member?

Large gifts, especially of capital property, are considered dispositions and may incur capital gains taxes. Attribution rules may apply.

b.) How to Transfer a Property Title to a Family Member in Toronto?

A lawyer handles property ownership and title transfers in Ontario.

c.) Who Is the Legal Heir for a Mother’s Property?

Spouse and children are typically considered legal heirs, with specific rules applying to common-law partners.

d.) How Do I Transfer Property After the Death of a Parent in Ontario?

Distribution depends on the presence of a will. Without a will, probate may be required.

As life events prompt reassessment, understanding the intricacies of property transfer in Canada is vital. Professional advice, including consultation with property managers, can help make informed decisions, ensuring optimal financial outcomes amidst the complexities of family law.