Can your minors buy properties in Canada？ No inheritance Tax in Canada? Income tax Capital Gain Tax
Can minors buy property? Is there really no inheritance Tax in Canada? What’s the best way to buy a property for kids? I will answer all the questions through this video.
Let’s see a case first.
Grandpa put 10 years old grandchild’s name on the title, but later for some reason they need money from this property, they had to go to BC Supreme court to get an order for that change. it will take a long time and so much trouble to sell it even refinance.
So the answer to the first question is: No, your children can not buy directly. but you can let them be the owner. If you will have mortgage from the bank, it will be more complicated.
If they are the owner, if you have any change for this property, it will be big trouble, you need order of supreme court just like the case we mentioned.
Why do people still want to do that? Cause, Tax
So Let’s talk about inheritance tax in Canada.
So the answer to the second question is: No Inheritance Tax in Canada. But it doesn’t mean the Canada government is too kind to collect tax. You are wrong, it’s in different way.
Example: A bought a house in 1990 in Vancouver West around $30K. and A died in 2022 Mar 19. The market value is $7.03M, no will from A, no more mortgage. If A has 3 kids. Can they get this $7.03M? how much can they get total?
No, the CRA, not only CRA, including provincial government as well, will think A sold this property and all his other assets just the moment before A died. And A should pay capital gain, the capital gain will be $7.03M - 30K = $7M. and 50% of them will be as income for A for 2022. and just make it simple no other incomes and assets for A. the income tax will be around $3.5M. after tax. And then 3 kids of A can share $3.5M.
But , If it’s farm property, fishing property or small business, maybe there is an exception.