# Putting my daughter as co-owner on my house.



## Scratch (Mar 4, 2016)

My wife and I are co-owners of our house for 35years now. We would like to add our daughter as well. She already owns a house. 
1. When we sell the house would capital gains have to be paid on her portion?

2. Would capital gains have to be paid from when we first bought the house till sale date or when we added her as a co-owner till sale date?

3. If we both die at the same time would there be any capital gains as she is a beneficiary in the will?


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## AltaRed (Jun 8, 2009)

It could unnecessarily complicate matters with the CRA as they may assume she then has a one third interest in the home and then she would be responsible for any capital gains between the market value of the house on the date title is revised and when the house is eventually sold. BUT that not need to be the case if there is a written agreement she is not putting up any capital, or at most, $1 towards ownership in the house. 

At the very least, get an official appraised value of your home at time of title change so that there is CRA acceptable documentation as to the value of the house at time she was brought on to title.

Not sure why you are wanting to add her to title, especially since she has her own home. There is also the risk of her putting liens on your house OR a creditor coming after the house if the daughter gets into financial trouble. There is also a risk, if she is married, that her estranged husband will insist on his share of her assets, including a portion of the value of your house. Think hard about why you are thinking of doing this. I would not consider it in 1000 years no matter how much I love or trust my grown children.


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## RCB (Jan 11, 2014)

Scratch said:


> My wife and I are co-owners of our house for 35years now. We would like to add our daughter as well. She already owns a house.
> 1. When we sell the house would capital gains have to be paid on her portion?
> 
> 2. Would capital gains have to be paid from when we first bought the house till sale date or when we added her as a co-owner till sale date?
> ...


IMO, there is little benefit to adding her to the title if you plan to sell. If you are looking to provide her with money, just sell and gift money to her.

1. Possibly, if the value increased after she was placed on the title.

2. From the time she was added to the title, based on an appraisal (not from a realtor) at the time she was added to the title.

3. If she is on the title at the time you both die, she will become sole owner on the title. Your names are just removed due to death. Yes, if she sold she would have capital gains for the whole sale amount, over and above the appraised amount at the time she was placed on the title.


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## RBull (Jan 20, 2013)

I agree with all of the above. 

It would be helpful if people knew what is your purpose is in wanting to this.


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## heyjude (May 16, 2009)

If you want your daughter to inherit the house, why not just say so in your Will? She will not be liable for any inheritance tax. If she does not want to live there, she can obtain an appraisal at that time, as a basis for capital cost appreciation.


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## lonewolf (Jun 12, 2012)

Scratch I don't like the idea. I can see your daughter wanting to put her house in your name if she is about to get married or have a guy move in with her so they would not have a claim on your daughters house.


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## OhGreatGuru (May 24, 2009)

heyjude said:


> If you want your daughter to inherit the house, why not just say so in your Will? She will not be liable for any inheritance tax. ...


There may be no official inheritance tax, but there are probate fees proportional to the value of the estate, and if the house is passed through the will it could considerably increase the cost of probate. And the legal fees may also be proportional to the value of the estate. Also, if the rest of the estate is simple enough, probate might avoidable entirely. But if the house is in the will, it has to be probated.

Having said that, there are several other threads on similar questions that point out a number of possible complications with such proposed joint ownerships, particularly with tax reporting. Consequently posters often recommend against adding a beneficiary to the title. People who think they are simplifying things by doing so frequently discover they have just complicated things. 

Some estate planning sites recommend that if you are putting assets into joint ownership purely for estate planning purposes, but without intent to convey "beneficial ownership" until your death, that you should prepare a written agreement stating that. In some cases I think this is overkill, but with real estate it might be wise.


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## sags (May 15, 2010)

It sounds like a written agreement would be an admission that it isn't a true joint ownership of the property.

_You may run into the issue of inter-generational joint property. From what you've said, your intention is not for her to own the property but simply to avoid tax issues. Therefore it isn't a "true" joint ownership in the sense that you don't intend for her to own and retain this property for her own use after your death. Your property may be held in trust for the estate until a judge decides on the available evidence whether or not this is a true joint ownership._

http://estatelawcanada.blogspot.ca/2013/08/should-i-add-my-childs-name-to-title-of.html


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## AltaRed (Jun 8, 2009)

As can be seen, doing things simply to avoid assets going through probate have their myriad problems. The problem with a written agreement Sags mentions is an issue specifically for estates with multiple heirs. With a single beneficiary, all that is being saved is the probate fee and associated legal fee (if it is based on estate value). I don't know that it is worth several other potential issues having a 'joiint title of convenience', especially if CRA doesn't buy it (without a written agreement).

I've seen way too many posts and threads on this site about how people think joint ownership of various assets, both capital and real property, is a way to beat the tax man. It often works, but when it doesn't, all hell can break loose.


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## twa2w (Mar 5, 2016)

Putting your daughter on the title could have lots of potential headaches but taxation is not one of them. CRA specifically allows for joint ownership as per your situation, unless you plan to give your daughter a share of the sale proceeds when you sell, or register her as a joint tenent rather than as a tenant in common.
If you die and still own the home, your daughter can transfer the title to herself. She would then reponsiblefor any gain incurred from that date forward(I think if she sells within a year she can avoid this) in any event she should have the home appraised at the time she takes full title.
Cheers


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