Quote:
Originally Posted by Nufy
If you are already on title and the parent passes away...
Currently my wife and BIL are on title with my MIL for her condo.
Its fully paid off so there are no mortgage / estate concerns.
What are the tax implications in that situation.
Are there still inheritance taxes?
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In that situation, there can be tax implications if it increased in value after they were put on the title. Because it's (presumably) not their principal residence, they don't get the exemption from capital gains taxes if the property increases in value.
If it was set up as a trust or there's formal documentation showing that their share of ownership is small, then it might not be a big deal. But if they were just added to the title willy nilly, then the CRA will likely assume that they each own 1/3rd of it, so they'd each be liable for taxes on 1/3rd of the gain since that happened.
So no inheritance taxes per se (and in fact, the condo would be excluded from the estate because it would simply transfer to the surviving owners), but depending on how it was set up they might be liable for capital gains. Whereas if it just remained 100% in the mother's name, then there would be no capital gains taxes owing because she could use the principal residence exemption on all the gains. But if the gain is small, then it's really not a big deal.