How Do You Put a Home in Trust for a Family Member in Ontario?

You can hold a home in trust for a family member, but the transfer can trigger land transfer tax and income tax even when no money changes hands. A lawyer should draft the trust itself, because the wording depends on your goals and who is involved.

Ontario's Land Transfer Tax Act has no general exemption for gifts of land, but no tax is payable if no consideration of any kind passes. If the home is gifted subject to a mortgage the recipient takes on, tax is payable on the amount owing at registration, whatever the relationship. Tax can also apply to an unregistered transfer of a beneficial interest, due 30 days after the disposition, and a trustee must file a return within 30 days of becoming aware of it.

Whether a transfer to a bare trustee is taxable depends on what consideration or mortgage passes and whether beneficial ownership changes. A parent gifting a home to a child may be treated as selling it at fair market value for income tax, which can trigger a capital gain, though a principal residence can be designated on Schedule 3 to claim the exemption. A lawyer or accountant can confirm your situation before you sign.