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Should I add my child to the title of my home?

Should I add my child to the title of my home?

by | May 19, 2022 | Wills & Estates

We always answer this with “no”. 

We understand why you might think this is a good idea, though. Joint tenancies with your child can be a simplistic way to transfer ownership of your property directly to your child after you die without having to go through probate.

Can you avoid estate administration tax (EAT) by adding my child to the title of my home?

The simple answer is “yes” but there are situations where avoiding EAT will cost you more in the long run.

When your child is listed as a joint tenant, it is likely that the home will not be their primary residence. There will be potential income tax complications, like capital gains, from doing this. In Ontario, your child will forfeit their first-time buyer’s exemption for the property transfer tax on the home purchase.

There are multiple reasons why it is never a good idea to add your child to the title of your home:

  • Potential financial problems with your child or their spouse.
  • Potential sibling conflicts if only one child is named on title.
  • If you ever wanted to re-finance or sell your home you would need the permission of your child.
  • Tax implications such as capital gains.

Here is an example from CBC of a situation where trying to avoid paying EAT did not turn out how the family intended:

For example, let’s assume the daughter was registered on title of her mother’s home worth $500,000 back in 2011.

In 2019, if the mother passes away and the home is sold for $1 million, this causes a tax problem if the daughter already owns her own home.

On the mother’s death, half of the appreciation on her home (the daughter’s portion) since 2011 would be subject to capital gains tax — a tax bill of approximately $63,000.

In order to save $14,000 of probate tax, which is slightly less than 1.4 per cent of the value of the home ($1 million), the family will have to pay approximately $63,000 in capital gains tax.

Had the daughter not been registered on title of her mother’s home, the estate would pay the probate tax but the proceeds of the sale of the home would arrive tax free. They would be better off by $49,000.

While adding your child to the title of your home might help the estate avoid paying some tax, this is a risky choice to make. There may be less risky ways of achieving the goal pf paying less estate administration tax.


McMurter & Associates in Whitby has been providing estate planning services throughout the Durham Region for more than 30 years. We have the experience needed to provide you with expert advice for any of your real estate and estate planning needs.

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