Clever Housing Options For Seniors And Young Families

97 Clever Housing Options For Seniors And Young Families
Clever Housing Options For Seniors And Young Families

As you age, you may want to see you children enjoy the wealth you anticipate leaving them upon your death. Especially at a time when many young families are barred from entering the housing market due to low housing inventories and high prices in many Canadian cities, parents may want to offer a helping hand to home ownership. Transferring property to children or buying property for them can eradicate resources you might need in your retirement while having costly tax consequences for you or them if you do not proceed carefully and in line with the tax codes. Current economic times call for creative housing solutions.

Perils Of Real Estate Transfer To Children

With the best of intentions, parents who own real estate decide to transfer 50% or more of the ownership to their house to their kids in hopes of avoiding inheritance taxes or probate fees. When the property is the principal residence for the parent, they may escape tax liability, but the children may be taxed on the appreciation for their percentage. Canadian taxing authorities consider the transfer as a partial sale.

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In some cases, a tax advisor might recommend this transfer so as to let the kids receive the full benefit of increasing values, but when the children pay the tax, they are in effect pre-paying tax that may be greater than had the house not transferred until the parents’ death.

Co-Ownership Options

An increasing popular way to effectively share property use is through co-ownership, where multiple generations own it or even occupy it. This can take several forms.

The most traditional is buying the home together. When the parent co-invest simple to help their children obtain a mortgage, the owners may have to pay capital gains when the place is sold. If the parents want to gift their contribution, they can have their tax advisor set up a trust for their interest that will ultimately go to the child.

For some families, sharing the same space is a workable approach to co-ownership. In a single-family home, there is mixed of personal areas and shared space that works well for many families. Increasingly, this is taking the form of sharing separate spaces on the same property.

The property may have an income suite on the upper or lower level, or the home may be constructed as a duplex. There may be a secondary suite on the property that this a small, self-contained homes that might be called granny flats or granny pods, coach houses, laneway houses, garden suites, or guest houses.

Advantages Of Secondary Units

This arrangement has several advantages:

– Building the home can be much less expensive than building separate houses on two lots.

– The small dwelling can be a first residence for a small, young family or a down-sized home for the parents. As the needs of each segment of the family changes, the families can swap residences.

– The arrangement keeps grandparents nearby to assist with their grandchildren, while allowing grown children a convenient way to keep track of aging parents.

– When the family no longer needs or wants to share the property, the unit can be rented out as income property.

If you are looking to buy or sell a house with a space that can be an income unit or separate space for parents or children, call me today. If you are ready to sell your home for maximum value, the best place to start is by clicking here and scheduling an appointment.

 

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Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991, Roy specializes in helping retirees with their later in life real estate transactions. Call Roy at 902-497-3031 or contact Roy here

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