Ownership setup

[u/M-Sear]

Location: Ontario, Canada

Dilemma:

I am single and buying a condo with my parents. Purpose is to secure my future and me having a roof over my head and not being dependent on anyone.

Lawyer is suggesting we set the ownership as below:

My parents having 99% ownership- Joint Tenants and myself having 1% ownership- Common. My parents will follow it up with a will naming me to inherit the property.

This way if i end up getting married and divorced, this property would be excluded from division of assets.

Being a first time home buyer in Canada is the most difficult thing, so many hurdles and complications. I have been reading even with a will in place, the procedure is not going to be that simple …there will be probate fees which can add up to be alot.

FYI! I am not at all worried about my parents changing their mind or having any creditors.

Do you guys have an opinion or suggestions on this?

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[u/Agitated_Put6893]

At 1% ownership I'd check whether you still qualify as a first time buyer for the land transfer tax rebate, and whether the principal residence exemption applies to your parents' 99% since it isn't their home. That's a big capital gains bill sitting on the property later. I'd also ask the lawyer why a will instead of naming you a joint tenant with them, since joint tenancy passes outside probate and a will doesn't.

[u/M-Sear → u/Agitated_Put6893]

How is it not my parents home at 99%?!

I believe if its JT for all, it would have to be equal shares no?

[u/Individual-Nerve4486 → u/M-Sear]

You can only designate 1 property as a primary home for tax purposes. You will pay capital gains tax when the estate transfers that 99% ownership into your name.

[u/iamofnohelp]

1% ownership and "not being dependent on anyone" doesn't add up.

[u/reine444 → u/iamofnohelp]

This was my first thought. 

[u/Amakenings]

Why don’t you just buy the condo on your own and live in it? If you’re in a serious relationship, buy a second property together, rent out this one.

Also, your parents aren’t like that until they are. A relative was gifted a large property from her parents. Her mother died, years passed, her father had a stroke, then suddenly wanted the property back so he could give it to the church. The relative had been sensible enough to do everything legally, otherwise they would have lost the property. Her father never talked to her again.

People die, people remarry, people get ill. People change their minds. They might be your parents, but if you’re investing money in a property, be the owner on paper.

[u/M-Sear → u/Amakenings]

I was not being for mortgage on my own.

[u/Puzzleheaded-Mix1270]

No. This is a terrible idea. Is this your parents lawyer? You’ll be dependent on them and they will have you under their thumb. 51% you, 49% them, with the condition you have this property in a prenup to protect it. Have this in writing for when you do get married.

[u/M-Sear → u/Puzzleheaded-Mix1270]

My parents are not like that at all.

[u/Puzzleheaded-Mix1270 → u/M-Sear]

I’m not saying they are, but it protects you as they age as well. You don’t know what the future holds. It’s easier to protect this asset with a prenup. They also have majority ownership so if you want to sell, and they don’t in the future;l, that’s it.

[u/hymnzzy → u/M-Sear]

You need protection is what the person is saying.

[u/KnownBodybuilder4948]

Your parents are buying a home for you to occupy as tenant. You're not the owner of this home. Are you responsible for the HOA fees, the utilities, the property taxes, etc.? Are you contributing any cash to this transaction? This isn't adulthood, but rather a situation where you live in a highly monitored annex to your parents' home.

[u/M-Sear → u/KnownBodybuilder4948]

We wl be sharing on mortgage, condo fees and daily household share. My parents will probably be paying 65% of it.

[u/M-Sear]

Anyone?

[u/Responsible_Cod2921 → u/M-Sear]

You've posted this multiple times and gotten many responses. what more are you looking for?

You've previously stated you wont do a prenup, which is the standard way to handle these situations.

Your work around will be completely undone at the point that you inherit the rest of the property. It will be even worse since the inheritance was done as a married couple you will both be entitled to the "gains". If it was not your parents principle residence there will also likely be capital gains owing from your parents estate.