How to Pass Properties to Your Kids in Canada

This is becoming a hot topic with investors we work with. How do you pass any income properties you've owned to your children in a tax-efficient way? It's a complicated answer and we are not experts in this. However, we've seen enough now to be able to share a high-level overview of what you need to be prepared for. In this week's Rock Star Minutes we discuss all this and more!
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[@rockstarinnercircle]

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[@NiagaraBTC]

I highly recommend the book "How To Keep Taxes Away From Your Wealth" by Henry Wong, Jayson Lowe, and Richard Canfield. Really fits with this topic.

[@kurts3779]

If you're a small time property investor then just put your kids on Title later on while you're alive and ensure the properties are registered with all of your names as Joint Ownership with Right of Survivorship. What that means is when someone on title passes(presumably the parents first) then the deceased parent ceases to be the owner and the other surviving owner becomes the full and beneficial owner without paying taxes as the property would bypass the Estate.

[@shawnw8046]

This was mentioned at the start. Putting kids on title is still a tax event you will need to pay, just at that time vs later.

[@alexeytot4871]

Also if you are young and your kids are young or below 16. Or not even born yet, what do you do to then?

[@onlychild4332]

With married kids their spouses can put claim on it too in case of divorce or otherwise

[@Adam.Financial]

Well said! This is exactly what I specialize in as an insurance professional. We work with real estate investor's to make sure that their beneficiaries/estate have the funds to cover capital gains taxes. We achieve this through whole life and universal life insurance policies. Thanks for the video

[@onlychild4332]

Life insurance payouts to the estate , at this time are tax free in Canada

[@fredhooshi4294]

What if the kid that added has been living with parent since the house has been bought and it is also his residence?? appreciate comment

[@cottonkandy8959]

Not CA/CRA or estate lawyer…if the property is primary residence for the parent and his/her adult child, the adult child can be added to the property title at no tax implication for the parent or the child as long as both continues to claim the property as their primary residence. One of criteria is that the adult child has lived in the property for at least 6 months (for BC…not sure about other provinces /territories) and has proof if CRA comes knocking. Source: spoke to notary public and CRA

[@vdeblois1352]

What about if the home still has a mortgage?

[@alexeytot4871]

Indeed.

[@kellyhou9594]

My bet is that return on insurance sucks big time, you can maybe leave more to your kids even after paying a lot of taxes.

[@JaspreetSingh-793]

Not true. I have seen insurances that have 1 million permanent coverage with total input of 100K in those plans. So basically 10X comes out

[@fredhooshi4294]

no body aroud that I know has life insurance not enough explanation

[@marcelmed4574]

The title is a bit misleading, with a title like how to, I was expecting some real step by step scenarios. This is purely a message that you could have said explained in 30 seconds. Protect realestate assets get a whole life or universal life policy.

[@kevinbeausoleil8104]

When the parents add names to title it will be a deemed disposition by CRA. The strategy doesn’t work and costs significant tax.

[@almontoya5703]

What if one of their kids uses that property as primary resistance and the fact he/she never bought a house?

[@kevinbeausoleil8104]

@@almontoya5703 if it still belongs to the parents, the parents can sell it as a PR but will lose years of PR allocation on the house they actually live in.

[@borisli4817]

You spend all your life hording assets and hording money, yet you still need to worry when you die - sure you may have all this in place but the next generation can still squander it away - you’re hoping the next generation does this much extensive planning to preserve the wealth when they pass it down, which is highly unlikely. A dollar today is different than a dollar tomorrow. All these investors getting into all sorts of investments have no idea what are all the hidden and soft costs are

[@kurts3779]

Very poor THINK day to day, Poor people THINK week to week, Middle class people THINK month to month, Wealthy people THINK year to year, Very wealthy people THINK decade to decade, or generation to generation. Generational wealth, aka old money, was no accident. So teach your children to teach their children well. One day, when you're looking back at your life wondering if you were a good father, ask your yourself this: "how well did my grand kids turn out?"

[@jedeloriaga1115]

What if we sell the house.. buying the nxt house putting their name. Children will not be charge ?

[@munchems]

They will still get taxed when they sell.

[@dougiep2769]

Ya heres a chunk of property that will bankrupt you in taxes. To sopport nothing if you actually need it like heslthcare

[@Jackson-l3r]

That is all for the political currency. These laws don’t apply to Bitcoin. The new world is already here. There shall be no more theft.

[@ozama1]

lol if you didn't know this when you start investing your need better books and a circle of ppl.

[@RMD992-f2n]

just dont report it to the cra