M city 5 condos price list. Several ways to transfer property to children in Canada. More and more Chinese people decide to emigrate to Canada for the sake of a better life, a better education for their children and overseas investment.Please Visit: M city 5 condos price list to Get Your VVIP Registration Today!
They buy a house and settle down in Canada. With the rise of house prices in Canada in recent years, the previously inconspicuous house has easily become millions of property, often become a huge sum of property.
As for the Chinese, no matter where they are, parents’ love for their children is far-reaching. How many parents struggle all their lives to provide their children with the most worry-free future? Therefore, the huge property of real estate is naturally the greatest guarantee that parents leave to their children.
However, how to pass on wealth well has always been a big problem.
How to transfer the house under my name to my children? Which houses can be given away? How can I get the lowest handling fee for transfer of ownership? How to protect property from shrinking?
First of all, let’s take a look at two ways of property registration in Canada:
Joint property rights (Joint Tenancy) and joint property rights (Tenants-in-common).
New immigrant couples usually choose joint property rights.
Both husband and wife register the property rights of the house in the form of joint property rights, and once one party dies, the other who is alive automatically obtains the ownership of the house. If both parties register the property rights by way of joint property rights, the proportion of each person shall be indicated at the time of registration.
If one party dies, the other party’s convenience cannot automatically obtain the other party’s share, and the property needs to be redistributed in accordance with the deceased’s will or court decision.
At present, 99% of Chinese new immigrant couples choose joint property rights (Joint Tenancy), while properties jointly invested by cohabitants, remarriers or friends tend to choose joint property rights (Tenants-in-common) and own property rights on a pro rata basis.
For new immigrant couples who choose to register by way of joint property rights, their children were very young when they bought a house, and they did not think carefully about many things in the future, so the names of their children are generally not on the housing property rights registration documents. Once both husband and wife die, property and other assets will be regarded as bequeathed to their children, and estate duty is inevitable.
Spouses take precedence over children.
If the names of the parents and children are on the property rights document, once the couple dies, this common property right will automatically become a joint property right in accordance with the Canadian Estate Act and the Family Act, that is, the living spouse and children will be distributed in equal proportions, and the idea that the deceased party wants to give the property to the child automatically cannot be realized.
There is also a common strange phenomenon among new Chinese immigrants, which is that the property rights registration of flying families is relatively special. Many Chinese new immigrant families are husbands who earn money in China, and mother and son buy houses in Canada. There is no husband’s name in the registered name, only the name of mother and son.
Many people think that if the mother dies, the house will automatically be named to the child. In fact, even if the living husband is in China, even if his name is not on the real estate document, he still has the priority of property allocation. In this case, it should be specifically considered with reference to the will of the deceased or in accordance with the Family Law.
Ordinary housing transactions will involve the issue of handling fees, so as the case of internal transfer of real estate, how to minimize the cost and preserve the value of the property?
Today, we will introduce six more common ways to transfer to ensure that the entire transaction process can maintain the maximum value of housing.
Method 1: sell the house to your children at a low price.
Parents transfer assets to their children in disguise by selling the house to their children at a low price.
Advantages: according to Canadian regulations, if the property is the parents’ main residence, the value-added part does not have to pay tax.
Disadvantages: if the housing is sold to the children at a low price, it means that the tax burden of the value-added portion will be handed over to the children. In the case of high value-added real estate, this disadvantage is particularly prominent. If they sell investment property to their children, parents still have to pay VAT to the government. In the future, when children sell the property, the capital appreciation is calculated according to the difference between the selling price and the purchase price. For example, if the house is sold to the children now, and if the house is sold at 500000 in the future, the capital gains tax will be 500000 minus $1.
Method 2: sell the house for cash.
Parents sell their houses at Canadian market prices, take some of them and buy a small property for their own occupation, give the rest of the cash as gifts to their children, and then use the money to buy another house.
Advantages: this kind of cash to children is tax-free. More flexible and easy to quantify.
Disadvantages: the premise of this scheme is that parents’ self-housing must be sold, which is not feasible for families who want to keep their own housing for their children.
Method 3: add the child’s name to the co-owner.
Generally speaking, the husband and wife are the owners of Canadian property. After the death of one party, the house is automatically transferred to the living party without probate. At this time, the other party alive can add the name of the child to the column of “owner of the house”, and the child can inherit the house naturally in the future.
If both parties register the property rights by way of joint property rights, the proportion of each person shall be indicated at the time of registration. If one party dies, the other party’s convenience cannot automatically obtain the other party’s share, and the property needs to be redistributed in accordance with the deceased’s will or court decision.
Advantages: this method has the lowest cost and the simplest procedure. It is automatically transferred to the child when both parents die without paying any probate fee.
Disadvantages: in real estate, parents and children bear joint and several liability. If parents want to sell or mortgage their house, they have to obtain the consent of their children. At the same time, disputes may arise when either parent or child falls into bankruptcy, divorce, debt and other issues.
Method 4: testamentary succession.
Parents can make a will declaration as soon as possible and leave the property directly to their children.
Advantages: this can prevent children from dividing the family property before the death of their parents, and can maximize the protection of their parents’ lives.
Disadvantages: in theory, Canada has no inheritance tax, death tax and inheritance tax, but this does not mean that the estate can be inherited in its entirety. There are two main taxes and fees related to estate disposal in Canada, one is the income tax paid by the deceased for the last time, and the other is probate tax. This means that children need to pay certain taxes and fees.
In addition, many parents will worry that when their children get married, these assets will become matrimonial property, and if the child divorces, they will lose this part of the property. Therefore, it is generally recommended to do property notarization before marriage, sign prenuptial agreements, and avoid using parents’ inheritance property as marriage housing to preserve premarital assets.
Method 5: real estate trust.
Parents trust the property through a will, and children can inherit the property after the death of their parents.
In the case of large total inheritance of household assets, this is the first choice for reasonable tax avoidance.
Method 6: parents'”down payment” and children’s “mortgage”
Parents make a down payment when their children buy a house, but the down payment is used as an interest-free mortgage for their children, and the children need to return the down payment when they sell the house.
This method is applicable to situations where children’s marriages and families are still unstable. Under this scheme, children are not allowed to dispose of the house at will. In addition, if the children divorce their spouse, the money cannot be regarded as the common property of the husband and wife.