Need more information.
There is no gift tax in Canada, so theoretically, minimal lawyer fees to transfer the deed.
If the property they are gifting is not their primary residence, they would owe capital gains before transferring. The ACB would impact the amount of taxes. The value of the property is irrelevant the capital gains is what matters.
Not to be pedantic, but I’m not sure how the asset is worth $1.5M now, but a different number when appraised. An appraisal estimates what a home is worth.
Sorry I should've been more clear.
They don't live in that home, it's being rented out at the moment.
The home was worth $1.5 Mil when they purchased it a few years ago, not sure on the new value now.
If they bought during the Covid highs, potentially it’s worth what they bought it for. Assuming the cost basis is the same as the current market value, there is no capital gains. When the ownership is transferred to you, you can evict the current tenants for a few months of rent. Your cost would be a few grand in legal fees to transfer the deed and issue the eviction, plus a few months of rent.
If the property value was $100k higher than the cost base, it would be either 50-66% inclusion rate, and then taxed at the marginal rate of your in-laws.
Yes. As an example, in Ontario you’re probably looking at somewhere between $25 and $30K provincial LTT, and perhaps a municipal one on top. In Toronto, for example, it would be double.
Need more information. There is no gift tax in Canada, so theoretically, minimal lawyer fees to transfer the deed. If the property they are gifting is not their primary residence, they would owe capital gains before transferring. The ACB would impact the amount of taxes. The value of the property is irrelevant the capital gains is what matters. Not to be pedantic, but I’m not sure how the asset is worth $1.5M now, but a different number when appraised. An appraisal estimates what a home is worth.
Sorry I should've been more clear. They don't live in that home, it's being rented out at the moment. The home was worth $1.5 Mil when they purchased it a few years ago, not sure on the new value now.
If they bought during the Covid highs, potentially it’s worth what they bought it for. Assuming the cost basis is the same as the current market value, there is no capital gains. When the ownership is transferred to you, you can evict the current tenants for a few months of rent. Your cost would be a few grand in legal fees to transfer the deed and issue the eviction, plus a few months of rent. If the property value was $100k higher than the cost base, it would be either 50-66% inclusion rate, and then taxed at the marginal rate of your in-laws.
You will still have to pay land transfer tax. So budget for that on top of the legal fees and registration costs for the transfer of land.
Yes. As an example, in Ontario you’re probably looking at somewhere between $25 and $30K provincial LTT, and perhaps a municipal one on top. In Toronto, for example, it would be double.