In CANADA, can a parent just give a house to their child as a gift, in order to avoid estate tax when they die?

Does this work?





Can a person just ';gift'; a house to their son or daughter, thus avoiding estate tax? If this works, are there any issues around it for either party (meaning the parent or child)?In CANADA, can a parent just give a house to their child as a gift, in order to avoid estate tax when they die?
First, there is neither estate nor gift tax in Canada.





There _is_ a probate fee in certain provinces. In Ontario, depending on the size of the estate, it can reach 1.5% of the value of the estate.





Gifting any property is a disposition. Capital gains tax is triggered to the donor. If the house has always been the parent's principal residence, the property will be exempt of capital gains tax. Regardless, the property will be transferred with an Adjusted Cash Basis equal to the market value on the date of transfer.





If the parents continue to live in the house, the child will not be able to claim the house as principal residence. This has serious tax implications as well in a future sale.





Dying triggers a ';deemed disposition'; with the same effect as above.





So, if you believe the real estate market is at a low right now, it would be in the child's best interest NOT to receive the property until a later date, when the ACB will be higher, and therefore the capital gain on a future sale of the property will be lower.In CANADA, can a parent just give a house to their child as a gift, in order to avoid estate tax when they die?
No when a person gives a capital asset there is a disposition and the giver would be subject to capital gains on the house, however if it was used as a principal residence then the house would be exempt from tax.


No gift tax in Canada but other properties would be subject to capital gains.