# How does "right of survivorship" work with joint tenants owning property in Ontario?



## carverman (Nov 8, 2010)

*How does "right of survivorship" work with joint tenants owning property in Ontario?*

My mother and I bought my current property in 1996. Because I was not divorced at the time (Divorce final in 1998) and I didn't have a
legal separation drawn up by a lawyer, she did this to protect my interest in the property and keep my ex from claiming part of
it as marital property.
(agreed on separation date was Sept 1, 1994, but this was only a mutual agreed on date between me and my ex.)

*Here is my problem now..in 2012.*

My mother is now 87, and while I hope she has a few more years left with blessings from above, but the reality is that she may
be gone in the next few years. She own property in Toronto (house) and my brother lives with her along with my stepfather
(92) which has no interest in either property, certainly not mine. I have two brothers that will also have claim to her estate. 

Because my mother and I are listed as Joint Tenants on the deed of my Ottawa Property, the tax bill and any legal issue ((tax assessment)regarding the property is in both my name and my mother's name. 

*Since I moved in, I have paid the mortgage and taxes and all costs regarding my property from my own pocket.*

The question is now..
if and when she passes, is my house/property included in her estate?
or does the right of survivorship (we are shown as joint tenants on the deed) kick in, so that
I don't have to hire a lawyer to settle this at the time?

When I asked the closing lawyer this question at the time I bought in 1996, (right of survivorship in case of death of the
other person who jointly owns this property) he told me yes..but I don't see anywhere on the documentation with
the deed that it says so.

What do I need to do?


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## Mall Guy (Sep 14, 2011)

Provide it is "joint tenants" you don't need to do anything . . . joint tenancy is sort of a "last man standing" approach to ownership (you each have an undivided interest in the property whereas in tenants-in-common each party may deal with their share as they see fit). It is not going to say anything on the deed, as it is a concept at law. It is often used by married couples, to ensure the property transfers immediately to the surviving spouse. In the unlikely case that you predecease your mother (strange things can happen), then the property becomes hers, and is not available for your estate.


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## carverman (Nov 8, 2010)

Thank You for the clarification "Mall Guy". I thought that was the way it worked. The closing lawyer mentioned that, when I looked at my Deed and Land Transfer documents, I didn't see anything that indicated "ROS", so I was concerned of course, because this is my property and I don't want to have to deal with my brothers in a legal battle, (in the event of her death) or probate court.

In the "Chargor(s) section on the Land Transfer Document, it states:
("Me" = my real legal name
("mother") = my mothers real legal name)

"*Me" am a spouse. I am separated from my spouse and the property charged was not ordinarily occupied by us at the time of
separation as our family residence. "Mother" is not a spouse. *

my typed name and signature and date

my mother's typed name and signature and date

*as joint tenants.* 


I found out on a website (estatelawcanada,blogspot.ca) that if my mother's death precedes mine, I have to take a copy of her death certificate to the Ottawa-Carleton Land Registry office, to change the title to my name only? 

Can I sell my property (after her death) without having to do that?


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## kcowan (Jul 1, 2010)

You will have to transfer the title. It will not cost anything because it is between mother and son.

How is your stepfather going to react?


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## OhGreatGuru (May 24, 2009)

Your question and the replies above have dealt with question of ownership, and whether the house passes outside of the estate.

However, in re-reading OP, there may be income tax issues for the estate of the mother. It appears that mother is living in Toronto, so the Ottawa house is not her "Principal Residence". So when she dies her estate will have to pay capital gains tax on her half of the house. Will the the rest of the family be happy with this, if an adjustment for this cost is not made in the will?

PS: in re-re-reading the OP, it appears that the OP has been paying most of the cost of the joint property, so mother's "share" of the equity may be substantially less than my guess of 50%. So maybe it won't be a problem with the rest of the family. (because the tax liability may be small)


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## marina628 (Dec 14, 2010)

couldn't you take mom off now while she is still living for your own peace of mind?You will have to pay some legal and land transfer fees but may be worth it in long term.


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## carverman (Nov 8, 2010)

OhGreatGuru said:


> Your question and the replies above have dealt with question of ownership, and whether the house passes outside of the estate.
> 
> However, in re-reading OP, there may be income tax issues for the estate of the mother. It appears that mother is living in Toronto, so the Ottawa house is not her "Principal Residence". So when she dies her estate will have to pay capital gains tax on her half of the house. Will the the rest of the family be happy with this, if an adjustment for this cost is not made in the will?


You raised a point that I never considered OhGreatGuru. Up to now I haven't given it a thought, about the property she owns with me, being part owner will become capital gains taxable if it becomes part of her estate. 

I don't have a copy of her will (she is 87 now) and in her state of health, I wasn't going to bother her with small details like that..but now since you raised that important point, maybe I should..or at least my brother. 

When she signed her name on the deed in 1996, it was to protect me from my ex and her intent was not to be a "real" owner of my property, although on the deed she is basically a "silent" partner. She has never made mortgage payments on my propertu, nor she pay any property taxes on my property, nor upkeep, nor repairs to my property. I pay for ALL that, since I am the only one that has
lived in my property since I bought it in 1996. 



> PS: in re-re-reading the OP, it appears that the *OP has been paying most of the cost of the joint property, so mother's "share" of the equity may be substantially less than my guess of 50%. So maybe it won't be a problem with the rest of the family*.


I'm sure she is not aware of that. Certainly her house (that she is sole owner) in Toronto, has substantial value and her savings accts added to that, will leave a "substantial estate", with her funeral and burial plot prearranged for years. 
So it shouldn't be an issue with my brother living with my mom and "stepdad" (who is not married to my mother), only living common law for many years since he retired, helping her with some expenses on her Toronto home. 

*As a side note:* my "stepdad" is 92 and in ill health and currently my brother is seeking an LTC facility for him in the Toronto area, (His health has deterioated substantially in the last 2 years and he was never in the picture when I bought my house with my mother.)


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## carverman (Nov 8, 2010)

marina628 said:


> couldn't you take mom off now while she is still living for your own peace of mind?You will have to pay some legal and land transfer fees but may be worth it in long term.


Well, I'm trying to explore what options, I have right now Marina. I am 66 going on 67 with a incurable auto-immune disease that affects my mobility, (but it's not as serious as cancer where you only have "so much time" left). 
So lets say, I'm still around for another 10 years (76-77?) if the Good Lord allows.

My mother is going on 87. She may have a few years left, but maybe not 10 more (at 97), so "not so good news" may happen
within the next 5-10 years.

I am living mortgage free, although *my property taxes are going up 17,000 per year for the next 4 years* according to the latest assessment.
Now, with my Nortel DB pension currently in windup, I may be left with a small monthly annuity in lieu of the Nortel pension, within 1-2 years.

As living costs rise, my pension income OTOH is SHRINKING. I don't have any other income investments right now, so things may
get "sticky" as far as my ability to pay for my living expenses within the next 4 years. 
Currently, it costs me $600 a month to live in my home, that's 7200 per year...and my property taxes are about $2400.
ok, I can still afford that since my gross income is around 32K.

Within the next 4 years, with taxes going up, it will cost me an additional say $204 per year ($17,000 @1.2 mill rate)with the new
assessment property tax increase PER YEAR, so that is about $3300 PROPERTY TAXES ALONE by 2016..
but my income will shrink considerably from the windup of my Nortel DB pension by then.

*options*
=========

One option is to sell my property and rent an apartment. But I hate to do that unless I have no choice. I like my house and property,
and it's not going to be any cheaper at $1000 a month (minimum) for a 2 bedroom apt..even if they are available. 

Another option is that I may inherit something from my mother's estate within the next 4-5 years to supplement my reduced pension income by then,.... but I can't count on that ..she could live to 91.

Another option is to get signed up with the CHIP program, but yes, I would have to get her name off the title to do that.


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## carverman (Nov 8, 2010)

kcowan said:


> You will have to transfer the title. It will not cost anything because it is between mother and son.
> 
> How is your stepfather going to react?


"Stepfather" as we call him is not legally married to my mother, he is basically my mothers friend.
She is sole owner of her Toronto house. He just lives with her (since he retired at 65--he is 92), and shares expenses on her Toronto home. 

*He was never involved with the purchase of my Ottawa home,
and never has gotten involved with any legal or financial matters in the upkeep of my Ottawa home*.

So in any case, he has no stake in my house..and with no real family here in Canada to leave his estate to. 
He never married. (He has a pre-arranged funeral and will be buried in my mother's family plot, since he paid his share for it.)


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## MoneyGal (Apr 24, 2009)

carverman said:


> You raised a point that I never considered OhGreatGuru. Up to now I haven't given it a thought, about the property she owns with me, being part owner will become capital gains taxable* if it becomes part of her estate*.


If there are capital gains payable, they will be due when she disposes of her interest in the house whether it is through her estate or while she is living.


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## carverman (Nov 8, 2010)

MoneyGal said:


> If there are capital gains payable, they will be due when she disposes of her interest in the house whether it is through her estate or while she is living.


MG. I am confused by this statement.

In a previous inquiry by "BELGUY" on the CMF forum in 2010..you mentioned..

<quote>
Belguy - I hope your posting problems resolve! 

I spoke with two CAs earlier this week and asked them whether there was any issue with a PR held jointly by a mother and adult child, when the child has no other residence. Both of them said that they did not think there was any issue to be worried about. 

I also read the MoneySense article. The article could have been more clear - *the intention was to describe a situation in which the child (who co-owns a house with a parent) also has a completely separate principal residence.* 
*
The long and the short of it is that I don't think you have anything to worry about from a tax point of view in co-owning a house with your mom. *
<unquote>

In my case, my mother owns a principle residence (PR) in Toronto and is sole owner of her house. (I am not on title of the Toronto property). 

I own a home in Ottawa jointly with her and this is MY principle residence for 16 years. (I pay all expenses on it and paid off the mortgage on it). 

1. Upon her death, is there Capital Gains (CG) payable on her ownership of my property, even though the property ownership reverts
to me 100%.
2. Who has to pay the CG..me or my mother's estate?
3. How is the CG determined on her joint ownership of my property?

a) At time of her death?
b) after the house is sold by me
c) How is the CG on her ownership of my property determined?
some legal document filed by me based on the current tax assessment 

Thanks


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## MoneyGal (Apr 24, 2009)

Thanks for finding that old thread. I don't think you have anything to worry about from a tax POV, just like I said earlier. My only point in my post from this morning was that if there is a capital gain, it becomes due when she disposes of her interest in the house - whether that is before her death or not (and at her death, her interest forms part of her estate). 

In fact, it is probably clearer for you and for her estate planning if she disposes of her interest now. If she dies and is a co-owner of your house, her interest transfers to her estate.


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## carverman (Nov 8, 2010)

MoneyGal said:


> In fact, it is probably clearer for you and for her estate planning if she disposes of her interest now. If she dies and is a co-owner of your house, her interest transfers to her estate.


MG I'm confused.

From what I discovered on line (real estate lawyer's blog), a jointly owned property ( in this case mother and son), automatically reverts" by some implied legal mechanism to the son.

So the way, I see it at that point, I am the sole owner of the property. Are you saying that her interest (upon her death) transfers to her estate? And her estate has to pay capital gains on
her interest in my property?

Yes, I agree, it is better to get it transferred to me before she passes. With my divorce final 12 years ago, she doesn't need to protect my property from litigation by my ex.


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## kcowan (Jul 1, 2010)

We sought advice about being on title on MILs house in Richmond and Brother's house in Toronto. We would avoid probate fees upon death but expose ourselves to CG on both houses. We decided to just pay the probate fees.

When she dies, her estate must pay the CG on her portion of your house. The title will transfer to you but you must register the transfer. Probate fees will also be due on the gross amount of her portion of your house out of her estate. Without any documentation to the contrary, her share of your house is 50%. This will become part of her estate.

This was a very bad deal for you. But that is what you exposed yourself to by having her on title. I hope whatever it was protecting you from was worth it.


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## MoneyGal (Apr 24, 2009)

Huh. I needed to re-read my original post earlier. My advice to Belguy was in respect of HIS tax situation (also, if I recall correctly, there were no other beneficiaries of his mother's estate). You are asking about your mother's tax situation. I agree with kcowan, above. You need professional legal estate-planning advice. Your mother has an ownership interest in your house. However, as it is NOT her principal residence, CG taxes may be due. 

Belguy was about HIS tax principal residence exemption for a house he co-owned with his mom and also occupied as his principal residence. You are asking about your mom's tax situation for a house you co-own with her and she does NOT occupy as her principal residence.


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## carverman (Nov 8, 2010)

kcowan said:


> When she dies, her estate must pay the CG on her portion of your house. The title will transfer to you but you must register the transfer.* Probate fees will also be due on the gross amount of her portion of your house out of her estate*. Without any documentation to the contrary, her share of your house is 50%. This will become part of her estate.
> 
> This was a very bad deal for you. But that is what you exposed yourself to by having her on title. I hope whatever it was protecting you from was worth it.


I have started the process to get her to transfer her title to me. I consulted a lawyer here today in Bell's Corners (west end of Ottawa) and he advised me that if she no longer needs to be on the title (for whatever reason) to start transferring
her interests over to me, while she is still alive and lucid. I sent an email to my brother (who lives with her) to seek her agreement on that and I can initiate the paperwork from this end. All she has to do is sign.
Will I still have to pay probate fees if that is the case?


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## MoneyGal (Apr 24, 2009)

Probate fees, no (these are fees paid when an estate is being settled). 

Capital gains taxes, possibly yes, depending on your mother's overall tax situation. 

Transferring her interest in the property to you is a disposition (on her part) which may give rise to CG taxes, depending on the increase in value over the time she has co-owned it. Whether she will actually pay any CG tax will depend on her overall tax situation, including whether she has losses she can carry forward.


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## OhGreatGuru (May 24, 2009)

MoneyGal said:


> ...
> Transferring her interest in the property to you is a disposition (on her part) which may give rise to CG taxes, ...


The question is, what is her interest in the property? If she did not contribute to the downpayment, and has not paid any of the mortgage, her interest is zero from an investment point of view. Her name on the title was for administrative convenience and legal reasons as discussed by the OP. The mother may not have had "beneficial ownership" in CRA's terms. 

Even if the mother helped with the down payment you could probably claim it was a gift to the daughter at the time. 

In any case, as others have suggested, it would probably be worthwhile transferring title now while Mom can still answer questions about her intent.


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## MoneyGal (Apr 24, 2009)

OhGreatGuru said:


> The question is, what is her interest in the property? If she did not contribute to the downpayment, and has not paid any of the mortgage, her interest is zero from an investment point of view. Her name on the title was for administrative convenience and legal reasons as discussed by the OP. The mother may not have had "beneficial ownership" in CRA's terms.
> 
> Even if the mother helped with the down payment you could probably claim it was a gift to the daughter at the time.
> 
> In any case, as others have suggested, it would probably be worthwhile transferring title now while Mom can still answer questions about her intent.


This is indeed the question. Beneficial ownership (for a real property) typically comes with risk/liability, possession/occupancy, entitlement to income from the property, etc. The fact that mom was a co-signer on the property is another factor leading towards beneficial ownership. 

Here's the relevant Interpretation Bulletin from Revenue Canada on real property and beneficial ownership: http://www.cra-arc.gc.ca/E/pub/tp/it437r/it437r-e.pdf

I know that taking her off the title is a transfer/disposition of her interest. But what is the nature of that interest?


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## carverman (Nov 8, 2010)

MoneyGal said:


> This is indeed the question. Beneficial ownership (for a real property) typically comes with risk/liability, possession/occupancy, entitlement to income from the property, etc. The fact that mom was a co-signer on the property is another factor leading towards beneficial ownership.
> 
> Here's the relevant Interpretation Bulletin from Revenue Canada on real property and beneficial ownership: http://www.cra-arc.gc.ca/E/pub/tp/it437r/it437r-e.pdf
> 
> I know that taking her off the title is a transfer/disposition of her interest. But what is the nature of that interest?


I saw that document earlier but didn't fully understand it.

<excerpt from that document>
_As indicated in ¶ 1 above, the ownership requirement for the principal residence exemption contained in paragraph 54(g) can be met by the legal owner of the property. 
This is so even where the legal owner, e.g., a trust, is not the beneficial owner. However, as discussed in the current version of IT-120, there are other requirements that 
must be satisfied for a taxpayer to be able to claim the 
principal residence exemption. There are special provisions 
in the Act which make it possible for any personal trust, 
including a spousal trust, to claim the principal residence 
exemption if it disposes of the property. For more 
information on these rules, see Form T1079, Designation of 
a Property as a Principal Residence by a Personal Trust. _


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## carverman (Nov 8, 2010)

MoneyGal said:


> This is indeed the question. Beneficial ownership (for a real property) typically comes with risk/liability, possession/occupancy, entitlement to income from the property, etc. The fact that mom was a co-signer on the property is another factor leading towards beneficial ownership.
> 
> Here's the relevant Interpretation Bulletin from Revenue Canada on real property and beneficial ownership: http://www.cra-arc.gc.ca/E/pub/tp/it437r/it437r-e.pdf
> 
> I know that taking her off the title is a transfer/disposition of her interest. But what is the nature of that interest?


Thank you MoneyGal for bearing with me, while I try to understand what needs to be done through a lawyer (or real estate lawyer) now.
BTW, I saw that document earlier today... but didn't fully understand it.


<excerpt from that document>
_As indicated in ¶ 1 above, the ownership requirement for the principal residence exemption contained in paragraph 54(g) can be met by the legal owner of the property. 
This is so even where the legal owner, e.g., a trust, is not the beneficial owner. However, as discussed in the current version of IT-120, there are other requirements that 
must be satisfied for a taxpayer to be able to claim the principal residence exemption. 

[I*]There are special provisions in the Act which make it possible for any personal trust, including a spousal trust, to claim the principal residence 
exemption if it disposes of the property[*/I].

For more information on these rules, see Form T1079, Designation of a Property as a Principal Residence by a Personal Trust. _

I think that a real estate lawyer may be able to do something. to file some form, to adjust this so that disposal of my property by mom. is disposal of property as principal residence by a personal trust.
She didn't co-sign on the property to benefit in any way, only to protect me from the legal wolves at the time the property was bought.

If I interpret this site correctly, there are SOME exceptions allowed for a parent who is on the title with a child, where the child (me) lives in that property as principle residence. 
http://www.tavana.ca/newsletter/newsletter.asp?iddetail=18

<excerpt from newsletter above>
*UNDER WHAT CIRCUMSTANCES IS 100% OF THE CAPITAL GAIN ON THE SALE OF YOUR PRINCIPAL RESIDENCE EXEMPT?*
*You or a personal trust (but not a corporation) owned the property solely or jointly.*
You were a resident of Canada throughout your ownership of the housing unit.
***The principal residence was ordinarily inhabited by you, your spouse, common law partner, (current or former) or your child. (adult or underage).***

The exception is an election under Subsection 45(2) or 45(3) of the Income Tax Act, which allows you a four-year exemption from ordinarily residing in it. 
*The exemption can be more than four years if your job requires you to stay elsewhere.* See 13 below.

_You, your spouse or your children under the age of eighteen DO NOT own another property, which they designated as their principal residence.
_
***The primary purpose for acquiring and selling your principal residence was NOT to make a profit.***

The property’s use was NOT totally or partially changed throughout your ownership. (Post 1971) Partial conversion gives partial exemption see below.
The land on which the principal residence was built does NOT exceed half a hectare (5,000 square meters or 1.23 acres). 
This limitation could be increased depending on zoning by-laws and proof that a larger acreage was necessary for the full enjoyment of the property.
You did not own the land on which you built your principal residence for more than two years before putting a building on it and ordinarily inhabiting it.
<end of excerpt>


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## MoneyGal (Apr 24, 2009)

Just keep in mind that what you are suggesting in your post above is that your mother declare YOUR house as her principal residence. As a person can only have one principal residence at a time, this means she would lose the principal residence exemption for the years for which she is declaring your house as her PR. 

I need to stop the action (at least on my part) on this speculating; there are too many details to keep track of and the conversation is not clear. A professional advisor, likely a tax accountant with estate planning experience, should be able to help you sort this out. That person will need to consider mom's overall tax situation and estate plans as well. I know that joint ownership is often used as a "poor man's estate plan" but it is not without complications and this thread is an example of that.


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## carverman (Nov 8, 2010)

MoneyGal said:


> Just keep in mind that what you are suggesting in your post above is that your mother declare YOUR house as her principal residence. As a person can only have one principal residence at a time, this means she would lose the principal residence exemption for the years for which she is declaring your house as her PR.
> 
> I need to stop the action (at least on my part) on this speculating; there are too many details to keep track of and the conversation is not clear. A professional advisor, likely a tax accountant with estate planning experience, should be able to help you sort this out. That person will need to consider mom's overall tax situation and estate plans as well. I know that joint ownership is often used as a "poor man's estate plan" but it is not without complications and this thread is an example of that.



Ok, thanks. I understand, MoneyGal. 

From what I've been able to glean from CMF and the internet (estate lawyer's blog) it probably is not possible for mom's estate to pay CG on her joint ownership of my property after she passes.

*However one last question on this subject, if anyone can give me a comment at least.
If I go through the motions of hiring a lawyer to handle the transfer of her interest in my property to me, is there a CG tax payable by her (when she files her income tax), in the year that this occurs?*


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## MoneyGal (Apr 24, 2009)

IF there is capital gains tax payable, then yes, it is due in the year of the disposition of her interest. BUT whether or not there is capital gains tax payable depends on the nature of the interest she is disposing. You need tax advice to accompany the legal work.


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## fireseeker (Jul 24, 2017)

Resurrecting this thread to add a question: My FIL died two years ago, and now my MIL wants to sell her house. However, her late husband remains on title. I gather she needs to submit a survivorship application to the land registry office -- can this be done DIY, or is a RE lawyer necessary?


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