Trust Agreement for Property in Ontario: Bare Trust and Title Holding

Families and business partners often put a property in one person's name for another. A parent may hold title for an adult child who struggles to qualify for a mortgage. A relative may act as a nominee. In each case the name on title and the person who really owns the property are different people.

A bare trust agreement is the document that records that arrangement. This article explains what it does, what it should say, and the tax and practical risks on both sides. It is general information; because your facts matter, a lawyer should confirm how it applies to you.

What a bare trust is in plain words

In plain words, a bare trust is an arrangement where one person's name is on title (the titleholder or nominee) while someone else (the beneficial owner) is the real owner. What the titleholder must do and who pays the costs depend on what you agree in writing and on the facts, so it is worth confirming the details with a lawyer.

If you have nothing in writing, the titleholder's word, memory and family relationships are all that stand between the real owner and a dispute.

Why the written agreement matters

If the titleholder dies, separates, goes into debt or simply changes their mind, the first question is who owns the property. A written agreement gives everyone something concrete to point to, and a lawyer can explain how it would be treated in your situation.

• For the real owner, it records that the property is held for them.
• For the titleholder, it makes clear that they act for someone else and are not the true owner.
• For lenders, accountants and family members, it explains why the names on the mortgage, title and tax records differ.
• For the estate of either person, how the arrangement would be treated depends on the facts, so it is worth confirming with a lawyer.

What the agreement should say

A good agreement is specific. The following list covers the points a lawyer will usually want to settle with you.

• The full names and addresses of the titleholder and the beneficial owner.
• The legal description and address of the property.
• A clear statement that the titleholder holds the property only for the beneficial owner.
• Who pays the mortgage, property tax, insurance, repairs and utilities.
• Who has the right to live in, rent out or sell the property, and who receives the rent or sale proceeds.
• That the titleholder will follow written directions and transfer title on request.
• What happens if the titleholder dies, becomes incapable or cannot be found.
• How the arrangement ends, and who pays the costs of the transfer.
• Signatures of both people, ideally with independent legal advice for each.

A power of attorney is a different tool. Ontario's guidance says the attorney need not be a lawyer, the grantor must be 18 or older and mentally capable, and typical duties include keeping up or selling the house.

Tax, transfer and reporting issues

Most transfer of title documents on the electronic system need two different lawyers to sign for completeness, with limited exceptions. Whether land transfer tax or an exemption applies to a particular transfer depends on the facts and the transfer, so confirm it before you sign. For reference, Ontario's provincial rates for agreements after November 14, 2016 start at 0.5% to $55,000 and rise to 2.0% above $400,000, with 2.5% above $2,000,000 for land with one or two single family residences.

CRA trust reporting is changing. For 2025 taxation years, CRA does not expect bare trusts to file a T3 with Schedule 15. Certain bare trusts may need to file for 2026 and later years, and CRA's EFILE page dated October 5, 2026 refers to taxation years ending on or after December 31, 2026. The changes are proposed in Bill C-15. T3 returns are due 90 days after the trust's year-end.

Risks that a trust agreement does not remove

A trust agreement helps between the two of you, but outsiders look at registered title. If the titleholder owes money to CRA, a certificate of amounts owing is registered in the Federal Court, has the effect of a judgment, and can be registered against property in a province to create a charge. Whether that reaches property the titleholder holds only for another person depends on the facts, so legal advice matters if this happens.

If more than one person is on title, the Partition Act allows joint tenants, tenants in common and other interested parties to be compelled to partition or sale. Mortgage lenders may also expect to know who the real owner is. How much to tell a lender depends on your situation, so ask a lawyer how to handle disclosure.

There is also a tax issue if the arrangement is really something else. CRA says profit from buying to flip, assign or build and sell is business income, not capital gain. If a nominee is used on a project like this, the tax result depends on the facts.

What to do next

• Write down who paid what, when, and why the property is in one person's name.
• Gather the title, mortgage, insurance and tax records.
• Speak to a lawyer before signing, and consider separate advice for the titleholder and the real owner.
• Ask an accountant whether T3 reporting or other tax filings apply to your arrangement.
• Keep the signed agreement safe and give each person a copy.
• Review the arrangement whenever there is a death, separation, refinancing or sale.

Frequently asked questions