What is the best way to take title with a parent?

I see a lot of clients who are buying their first homes, and getting some assistance with either the down payment or the financing from a family member, usually a parent. Most of the time, because it’s not something they would have come across on their own, they have not considered how they should take title.

There are two ways of taking title to property in Ontario: joint tenants, and tenants in common. Joint tenants means that everyone owns the whole thing jointly with everyone else, and there are survivorship rights if one owner dies. Tenants in common means that you own shares, in whatever percentage you decide – the default is equal shares, but you can set it differently. For example, if you are going on title to your daughter’s house solely for financing, you can own 1% and she can own 99% to maximize her first-time buyer rights and minimize any chance you could be charged capital gains taxes.

If you are going on title with anyone – even with a spouse – you should be asked how you want to take title, and get more information if you’re not sure. It’s a big decision that can affect you financially down the road.