More than ever, parents are getting involved in helping their adult children get into the real estate market. High housing prices have made it challenging for first-time buyers, and many rely on the help of family to reach this milestone. One way parents are helping is through joint ownership of property in Ontario. Yeah.

Is co-owning a house with your child a viable solution for your family in today’s market? In this post, we’ll talk about the implications of joint ownership and answer some of your most pressing questions when it comes to purchasing property in Ontario. 

There is no substitute for expert guidance when buying a house in Ontario. However, you’ll find plenty of valuable tips in our Home Buyer’s Handbook. Download your copy for free right here. 

Types of Joint Ownership

We should begin this post with a legal disclaimer; we are not lawyers, so please use this post for informational purposes only. To better understand all of the laws regarding joint ownership of property, we recommend speaking with an experienced real estate attorney.

There are two types of joint ownership of property in Ontario. Let’s take a look at Joint Tenants vs Tenants in Common and how they impact your ownership rights. 

Joint Tenants

What is joint tenancy? Joint Tenancy means multiple names are on the title, and each owner has an equal interest in the property. This means an equal right to possess the property, as well as an equal right to all appreciation in equity as real estate values rise. 

Both parties must be in full agreement on all aspects when selling the home. This includes when to list, what repairs to make, and the price. 

Joint Tenancy is generally the arrangement between spouses. However, many people are beginning to see the value in setting up home ownership with other family members, including their adult children. 

Tenants in Common

Tenants in Common means each owner holds a separate stake in the property. One person can hold a greater percentage than the other owners on the title. For example, if you cover the down payment of the house and your adult child handles the monthly payments, you might agree that you have a greater share since you’ve made the bigger investment upfront. 

There can also be multiple names on the title, each with a varying degree of ownership. In addition, one owner can sell their share in the property at any time. That’s interesting.

As housing prices rise, we are beginning to see Tenants in Common arrangements happen more frequently. These can be between a parent and child, friends, siblings, business partners or any combination of these. 

What else should you consider before buying a house, either on your own or with someone else? The posts below can help you plan for success:

FAQs About Parent-Child Joint Ownership Of a House in Canada

Both Joint Tenants and Tenants in Common have several advantages and disadvantages, and it’s important to understand all of the nuances of each before setting up your title. Let’s take a look at a few more questions our clients often ask. 

What happens to a jointly owned property if one owner dies in Ontario? 

It depends on how the title is set up. Joint Tenants with right of survivorship means the title automatically transfers to the surviving owner. No probate is required; it’s as though the deceased’s name simply drops from the deed. 

Tenants in Common is very different. If one owner passes away, their stake in the property becomes part of their estate. Once probate is complete, their share will pass to the person named in their Will. 

What are the risks of joint ownership?

It is also critical to remember that owning a home with someone else can also come with drawbacks. All owners have a right to the property. However, that also comes with shared responsibilities. If one person defaults on the mortgage or fails to pay the property taxes, it could fall onto the other owner. 

In addition, buying a home with both names on the title could trigger capital gains for the parent if you later decide to sell. The child moving into the house will likely be covered by the Principal Residence Exemption. However, it could be deemed as a second property for the parent if they already own a house. 

If the parent and child later decide to sell, the parent would likely have to pay capital gains on a portion of the increase in value. If the parent passes away, their portion of the title could trigger capital gains that will need to be paid before the estate can be settled.  

Can a jointly owned property be sold by one owner? 

Under Joint Tenants, both owners must agree to sell the house. Not only that, but they must also agree on all of the terms as outlined in the listing agreement. If one person wants to sell and the other doesn’t, there is the option of severing the Joint Tenancy and reverting to Tenants in Common. 

Under Tenants in Common, one owner can sell their share independently of the other. Even so, there can be legal complications, so it is always best to consult with a lawyer to determine the best course of action. 

Keep in mind that it’s often much easier to buy a stake in a home under Tenants in Common than it is to sell one. The reason is that many buyers are less interested in fractional ownership, especially with someone who isn’t a family member. Unless all owners agree to sell the home at the same time, it could be a complicated process. 

Where should you look for your next house? We can make a strong case for Halton Hills, which includes Georgetown:

What are the benefits of joint ownership of property?

The primary benefit of joint ownership is financial. It allows a younger buyer to get into the market as early as possible and begin building equity as real estate values rise. It also helps with estate planning since Joint Tenancy allows you to avoid probate. 

(Just a word of caution: the CRA might take a closer look if they believe sharing the title is for the sole purpose of avoiding probate rather than a natural transfer of ownership. If other heirs challenge the Joint Tenancy, the courts could deem the property as part of the deceased’s estate.) 

Some of the advantages of owning a home with someone else are intangible. It’s reassuring to know that no matter what happens, you’re in it together with someone you trust and who cares about you. Whether you share a home or just a title, you can rest assured that you are never alone in your journey. 

Do you have questions about buying or selling property and want customized guidance? Our Georgetown real estate agents can help. Give us a call directly at 905-873-9944, email us at info@lisahartsink.com or fill out the form on this page to get in touch!