How do I inherit a house in Canada?
Inherited property is given to you by another individual – typically a relative, usually a parent. This usually happens when they have passed away – which can make a stressful situation even worse as you navigate your way forward. This article will discuss your options and also provides a handy checklist to guide you with.
The first thing to consider is what kind of property it is. The inherited property can be:
- A primary residence: a house or property in which one typically lives in full-time. In this case, you don’t have to pay any fees to have the property transferred in your name.
- A secondary residence: a vacation home or cottage which one typically does not live in permanently. Here, you may have to pay transfer fees.
What do you do after inheriting a home? A checklist:
- Discuss with your relatives, siblings and anyone else who has ownership. Everyone involved should be informed of the possible options, and a consensus should be reached before any solid plans are made.
- Contact the home insurance provider to make sure that the home is fully protected. Also, collect any insurance documents that you might need.
- Change the locks, and remove valuables – especially if you decide to sell.
- Get a fair market value assessment. This will help you decide if it would be prudent to sell the property.
- Maintain the property as needed. This includes checking in on the home, perhaps weekly, and ensuring that it is clean and well-maintained. Tasks such as mowing the lawn, tending to the garden, and cleaning dust should not be ignored.
The ultimate decision is whether you keep the home or if you wish to sell it.
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If you decide to keep the home:
In Canada, there are no inheritance taxes. However, you will have to take over property taxes, insurance, and mortgage payments in most cases. Any repairs or replacements will also have to be financed by you.
If you decide to sell the home:
The capital gains tax will be applied should you decide to sell the property. This tax will also be applied should you choose to rent the property, as it would now be considered an investment property. You will also have to consider real estate fees and legal fees associated with real estate transactions.
If you are struggling between the two options yourself or a family disagreement in moving forward, consider consulting a real estate lawyer. They can provide you with expertise in legal matters concerning the property sale, if you need to challenge a will, or if you need to resolve a real estate dispute in your family.
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