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Title Transfers
Adding a spouse, removing a former partner, or transferring between family members. Each transfer also sets how the new owners hold title, which decides what happens when one of them dies.
Ownership Structure
The ownership structure should be selected deliberately. It affects what happens during the owners’ lives and after one of them dies.
Option 01
Joint tenants own the property together without separate ownership percentages being registered. Its defining feature is the right of survivorship.
If one joint tenant dies, the deceased owner’s interest ordinarily passes to the surviving joint tenant or tenants rather than through the deceased’s will.
Joint tenancy may be appropriate when
Points to consider
Option 02
Tenants in common own separate undivided interests in the property. Those interests can be equal or unequal, for example 50/50, 75/25 or another agreed division.
There is no right of survivorship. When an owner dies, that person’s interest passes under their will or, if there is no will, Ontario’s intestacy rules.
Tenancy in common may be appropriate when
Points to consider
At a Glance
The difference is not cosmetic. It changes succession, control and how each owner’s interest can be dealt with.
| Issue | Joint Tenancy | Tenancy in Common |
|---|---|---|
| Registered shares | No separate percentages | Equal or unequal percentages |
| Right of survivorship | Yes | No |
| Interest passes under a will | Ordinarily no | Yes |
| Common use | Spouses and aligned estate plans | Unequal contributors, investors and unrelated owners |
| Main concern | Loss of testamentary control and survivorship disputes | Estate administration and co-owner management |
Ontario Land Transfer Tax
Ontario land transfer tax is based primarily on the value of the consideration given for the ownership interest being acquired, not simply the property’s assessed value or the amount written on the Transfer.
Consideration can include
If someone acquires a 50% interest in a property and assumes responsibility for 50% of the outstanding mortgage, land transfer tax will generally be calculated on that share of the mortgage balance, together with any other payment or consideration.
Tax Treatment
The result depends on what is changing hands, not simply how the people involved are related.
| Transfer | Typical Land Transfer Tax Treatment |
|---|---|
| Adding a child with no payment and no mortgage | Taxable consideration may be nil, but income tax and estate consequences remain |
| Adding a child who assumes part of a mortgage | Tax generally applies to the corresponding mortgage debt and any other consideration |
| Transfer between qualifying spouses | An exemption may apply if the statutory requirements are satisfied |
| Transfer under a written separation agreement | May qualify for the spousal exemption |
| Survivorship application after a joint tenant dies | Generally not treated as a new taxable purchase |
| Transfer to a corporation in exchange for shares | Land transfer tax is generally calculated using the property’s fair market value |
| Transfer from a corporation to a shareholder | Fair market value is generally deemed to be the taxable consideration |
| Estate transfer to a beneficiary | Depends on the will, the beneficiary’s entitlement and whether consideration or other estate assets are exchanged |
Title Transfers
Transfers Between Spouses
Transfers between spouses are not automatically exempt in every circumstance. Ontario’s spousal exemption generally applies where the transferor and transferee are spouses or former spouses and one of the following applies.
Apart from natural love and affection, the only consideration is the assumption of a mortgage or other registered encumbrance
The transfer complies with a written agreement under which the parties have agreed to live separate and apart
The transfer complies with a court order or judgment
The statutory definition of “spouse” can include legally married spouses and certain common-law partners. The relationship and the terms of the transfer must be confirmed before relying on the exemption.
If one spouse is purchasing an interest from the other outside a qualifying separation agreement, court order or exempt arrangement, land transfer tax may still apply.
A transfer between spouses may also engage the income tax rollover and attribution rules. Land transfer tax relief does not necessarily mean the transfer is neutral for every other tax purpose.
After a Death
When property is held in joint tenancy and one owner dies, the surviving joint tenant does not usually receive the deceased’s interest through the will. The interest passes by right of survivorship.
A Survivorship Application is registered to remove the deceased joint tenant from title and show the surviving joint tenant or tenants as the continuing registered owners.
A survivorship application updates the land register. It does not create a new purchase, and land transfer tax is therefore not ordinarily payable.
If the deceased owned the property as a tenant in common, survivorship does not apply. The deceased’s interest passes through the estate, and probate or other estate documentation may be required before title can be transferred.
What We Do
Worth Knowing
A mortgage can remain registered even when its current balance is zero. Changing title without the lender’s approval may breach the mortgage terms or require a refinance.
Adding someone “for convenience” can produce disputes later. The transfer documents should clearly state whether the interest is a genuine gift, a trust arrangement or part of a broader agreement.
Mortgage debt, cash payments and other benefits can create taxable consideration even where the transfer is between family members.
Joint tenancy, tenancy in common, the will and any co-ownership agreement should all reflect the same intention. Relying on title alone can leave the estate plan incomplete.
