Canadian Money Forum banner

1 - 2 of 2 Posts

·
Registered
Joined
·
1 Posts
Discussion Starter #1
Need help figure something out for so I get an idea how to handle a situation.

My principle residents has 3 joint tenants on a title of my property (detached house in Burnaby) myself, and my parents.

They never lived in it only reason they were on title was to get a mortgage which I paid. Now I would like to remove them from the title. If I get a quitclaim will they have to pay capital gains on the increased value? If so is there a better way in handling it to pay no or less capital gains?

Thanks
 

·
Registered
Joined
·
1,893 Posts
It sounds as if your parents never owned a beneficial interest in the property. Whatever interest they held was held in trust for you. If that is the case, there should be no capital gain for them. Just one way of looking at things.

While a contemporaneously-executed deed of trust might have been a nicety to observe, the absence of one should not prove fatal to the trust characterization, if that was the effect of the arrangement.

I suppose one could ask, if they were not intended to have any beneficial interest, why place them on title? Why not just have them guarantee the mortgage? An answer would be that some lenders feel more comfortable having the parents' covenant as principal obligors rather than as guarantors or indemnitors, since there are potential defences available to the latter two groups in an action on the covenant that are not available to a mortgagor.
 
1 - 2 of 2 Posts
Top