New Condo: my name or parents name..??

[a in yul]

We are thinking of purchasing a new condo for our parents; is it better to put it under my name or theirs;

if its theirs are their any ramifications for seniors and the services they get including pensions etc..?

also, any thoughts out there on opening up a company, charging rent and then writing off the expenses..?

any thoughts or suggestions greatly appreciated.~!!

[pitz]

We are thinking of purchasing a new condo for our parents; is it better to put it under my name or theirs;


Well, you wouldn't have the benefit of the principal residence exemption if you were to own the property, instead of your folks.


if its theirs are their any ramifications for seniors and the services they get including pensions etc..?


Not usually. I'm not aware of any government program that considers the value of a principal residence for the purposes of government benefits/pensions.



also, any thoughts out there on opening up a company, charging rent and then writing off the expenses..?


Income tax would have to be paid, of course. If your folks owned the property outright, they would be able to exempt any capital gains, and the rent from the property would be directly imputed to them without any taxation whatsoever, other than the usual property taxes, etc.

[penf]

technically the CRA isn't concerned with the ownership of the asset as much as where the money to purchase an asset comes from. If you bought your parents the condo and put it in their name and they sold it at profit, the CRA would consider that you are liable for any taxes on the capital gain. I don't know the likelihood of being pursued for this but note the more common opposite situation where parents give a residence to a child & realize there are tax implications on the parent.

[Thalo]

technically the CRA isn't concerned with the ownership of the asset as much as where the money to purchase an asset comes from. If you bought your parents the condo and put it in their name and they sold it at profit, the CRA would consider that you are liable for any taxes on the capital gain. I don't know the likelihood of being pursued for this but note the more common opposite situation where parents give a residence to a child & realize there are tax implications on the parent.

A parent can gift money to an adult child and there is no attribution back to the parent. It's a good question though: does the same apply going the other way around? Can a child gift money to a parent and not have it attributed back to themselves? I really don't know. Pitz?

[pitz]

If the money is truly a gift, without recourse, then I don't see how attribution would apply here.

(Wealthy) Folks buy their (non-minor) children houses all the time. And there is no attribution.

[a in yul]

thx again guys, the comments were helpful;

basically i am not worried about selling the place since i want to stop paying rent where they live now and "invest" that money and buy a new condo;

i already have a property under my name, so the capital gains aspect is cleared up;

we do not plan on selling the new purchase place; the non-financial advantage is of having the parents closer;

the other thing i was worried about is do they lose out on their pensions and all, plus the inheritance tax if and when that issue comes up;

also the day they do decide to move in with us how would the condo be treated; ie would the biz setup allow us to rent it out to them, declare the expenses as tax deductible and...

thx in advance for all help and comments;:lol:

[pitz]

Reading your message, I'm not sure what exactly you are wanting to do.

Easiest thing to do is to give them the $200k or whatever and they go out and buy a house/condo. They own it. It would be their principal residence. And it would not affect their pensions or any other government benefits at all.

If you are the beneficiary of the house in the will, the only 'inheritance tax' would be the probate fees. These run 1-2% in most provinces on the entire estate.

I don't see any reason why you would want to be a formal landlord for your folks. You'd have to pay tax on the income, tax on any capital gains in the condo, and the deductions available are not substantial.

[a in yul]

I don't see any reason why you would want to be a formal landlord for your folks. You'd have to pay tax on the income, tax on any capital gains in the condo, and the deductions available are not substantial.


ok, gthanks to your info i have decided against being the landlord, will be buying the place and simplifying (sp) things; they stay, and if and when the decide to move in i will either worry about it then or just rent it out...

thx for your time and advice!!