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Hello,
I have a tax question for you:
My mother is alone in her house and she has $73,000 owing of which she has put on a credit line. (House worth roughly $600,000). I wanted to borrow $35,000 as part of a downpayment on a condo I purchased (to avoid CMHC fees ie. needed 25% down). To do this I had to go on TITLE with my mother on her house. Question: When she eventually has to sell the house, will I have to pay Capital Gains tax on the appreciation of the house from the time I went on Title with her to when she sells it? If so, are there any ways around this?
Thank-you for taking my question,
PXXXXXXXXXXXX
Vancouver
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david ingram replies:
Having your name on title does NOT mean that you own the buiding or any part of it. You are likely holding it in trust for her. Get a letter or note signed by both of you that acknowledges that your name is on the title for estate purposes or simply for you to use the house as security for a loan. The note/letter/agreement should also state that you have no financial interest in the property.
If you want help with this klind of agreement, try Bill Spohn, a lawyer in West Vancouver on the 11th floor at 100 Park Royal South (the same building the CEN-TA Office is in). His phone number is (604) 926-8681. His email is [email protected]
If you have the agreement, there will be no tax when your mother sells or passes away and leaves the property to you. A side benefit is that you have saved significant probate fees on her death.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
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