What should I know about buying a home jointly with my parents in Ontario?

Buying jointly with parents is an increasingly common way to enter the Ontario housing market, but it raises questions about ownership structure, tax, and what happens when circumstances change.

First, decide whether you will take title as joint tenants or tenants in common, and in what shares. This decision affects what happens if a parent dies, how mortgage financing is structured, and whether the home will qualify as your principal residence. If a parent already owns another property, they cannot also claim a principal residence exemption on your jointly purchased home, which has capital gains implications later.

Land transfer tax: if you are a first-time buyer but your parent co-owner is not, the first-time buyer rebate may only apply to your proportionate share of the purchase price. Ontario's LTT rebate rules require all purchasers on title to qualify in order to claim the full rebate.

Your mortgage lender will also count both incomes and both debt loads, which may help or hurt your qualification depending on the parents' financial profile. Lenders may require all parties on title to be on the mortgage as well.

A co-ownership agreement setting out how costs are shared and what happens when the parents want to be bought out is essential. A real estate lawyer can help structure the arrangement to reflect everyone's intentions.