Does anybody here own their parents home?

[stealth]

I'm thinking of taking over title of my mothers house so I can manage it, ensure all bills are being paid and the property is being maintained while protecting her from scammers, and of course letting her live there.
Has anyone else done something like this? Just wondering if anyone else has an arrangement like this, and if so, how its has turned out? Did you buy the hosue from your parent/parents, or was it a transfer of ownership, and what sort of tax/capital gains, etc. implications were there?
Thanks.

PS. I have a home of my own already, as well as a rental property.

[glacier76]

If the property is gonna be transferred to you, you're gonna have to pay capital gains tax upon the sale. Your mother wouldn't since she's gonna live there.

Can't you just become a power of attorney or something so you can make financial decisions on her behalf?

[stealth]

Thanks for the response. I've thought about exercising my power of attorney, but I think I'd run into problems if I ever had to get a mortgage on it (its a very old home that constantly needs work).

Question, does capital gains only apply when somethign is a gift? If I buy the house from her (obviously not at market value), would it still apply? I would think it would be treated as any other sale/purchase?

[StarvinStudent]

Thanks for the response. I've thought about exercising my power of attorney, but I think I'd run into problems if I ever had to get a mortgage on it (its a very old home that constantly needs work).

Question, does capital gains only apply when somethign is a gift? If I buy the house from her (obviously not at market value), would it still apply? I would think it would be treated as any other sale/purchase?

Capital gains applies when you sell a house that isn't deemed to be your principle residence.

[Wylliecoyote]

Capital gains does not only apply on gifts. If you purchased it at less than market your cost base will be the price paid and you will have to pay capital gains on it when you sell since it is not your primary residence. Talk to a bank and see what they say about giving a mortgage if the house is in her name, if that is a concern.

[pitz]

If your mother (upon receiving independant legal advice....or else, you could run into a lot of legal problems) decides to give you the house, you would be deemed to have received the house at 'fair market value' at the time of the transaction.

If the house is not your principal residence (ie: you have another house), then you would be liable for capital gains tax at the time that you sell. Further, you would have to declare rental income received from your mother as income on your income tax return.

Further, as you would own the house, it would become an asset that could be seized by your creditors, be the subject of divorce proceedings if you are married, etc.

As a power of attorney, you have a fiduciary responsibility to your mother, to always act in her own best interests. I would very strongly urge you to seek legal advice prior to using any powers under a Power of Attorney to effect either a mortgage or a conversion of title of her residence.

[dolphie]

you have a fiduciary responsibility to your mother, to always act in her own best interests. I would very strongly urge you to seek legal advice prior to using any powers under a Power of Attorney to effect either a mortgage or a conversion of title of her residence.
quoted for emphasis.
i'm not sure the OP understands this.

[pitz]

Capital gains does not only apply on gifts. If you purchased it at less than market your cost base will be the price paid and you will have to pay capital gains on it when you sell since it is not your primary residence. Talk to a bank and see what they say about giving a mortgage if the house is in her name, if that is a concern.

A transaction from a related party, such as a mother, must be done at fair market value. Selling the house for a discounted, or an inflated value (whichever the case may be), is not acceptable to the CRA for the purposes of determining a valuation for the purposes of capital gains.

To establish 'fair market value', at the very least, I would have a real estate salesman come in and do a 'free assessment' against comparable residences in the neighbourhood that are on the market or have recently sold. Most real estate agents would be glad to provide documentation that you should retain as evidence of 'fair market value'.

[stealth]

quoted for emphasis.
i'm not sure the OP understands this.
Thanks for the info guys. I'm actually not acting as power of attorney in this, although I see how it may appear as a conflict of interest. She's asked me to do this. I dont even really want the house as its a money pit, but she has asked me to help her out, and suggested this route, which makes sense to me as it protects whatever I invest into it as well. I should mention that in the past few years, she has had difficulty maintaining its condition, as well as paying property taxes on it.

[jande9]

You can buy it for the fair market value, but only make a small cash payment and give her a promissary note for the rest. Any capital gains would be calculated from the fair market value. Or alternatively, you can put your name on the deed as well as hers, so that the property would be left to you automatically and won't have to go through probate.

These are just ideas. You really need professional advice before you do anything like this though, as there are a lot of complex rules involved and thousands of dollars at stake.