Should you transfer property to a child and then rent it from them? Jul 27th

There are more insurance options in Canada than you can shake a stick at! Stay on top of the best policies right here.

Latest News

Commission warns N.B. residents against using Toronto insurance-related company - CBC Mar 21st

Commission warns N.B. residents against using Toronto insurance-related company CBC.... More »

Choosing a Group Benefits Advisor Mar 28th

How Getting a Group Benefits Plan Works A company that is looking for a benefits plan engages an advisor (e.g. a broker or agent) who then submits that company’s details to several insurance companies for a quote. (An experienced advisor will know which insurance companies are best suited for.... More »

How Small Businesses Can Stay Safe Against Cyberattacks + MORE Oct 19th

Today’s cyber thieves aren’t lone hackers working from their basements. Cybercrime increasingly has become full-fledged enterprises, complete with CFOs, HR teams and research and development budgets—and this “professionalization” of cybercrime presents a growing risk for small businesses, .... More »

Unlocking the Annuity Puzzle: Why Canadians avoid what seems to be the perfect retirement vehicle Dec 19th

The Annuity Puzzle is about a curious phenomenon in Canada: while life annuities sold by insurance companies seem to have all sorts of compelling reasons to acquire them, more often than not, retirees shun them. Financial planner Robb Engen recently tackled this puzzle in his Boome.... More »

TFSA contribution room calculator + MORE Nov 5th

Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. powered by Tax-free savings account is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like e.... More »

Should you transfer property to a child and then rent it from them?

– moneysense.ca

I would like to know if transferring our home into our daughter’s name—can we stay and pay rent and get a rental home credit? Is it valid?—Satyesh

Tax credits when renting property from a family member

There is a lot to unpack with your question, Satyesh, but I will address your direct question right off the bat.

If you rent real estate from a family member, if you both treat it as a legitimate landlord-tenant relationship, you may be able to claim a tax credit just as if you were renting from a third party.

Ontario has an energy and property tax credit, Quebec has a solidarity tax credit, and Manitoba has a residential renters tax credit. Each of these has a rent component and may result in tax savings for lower income taxpayers.

Your daughter would report the rental income and deduct applicable expenses like property taxes, insurance, utilities (if she pays them) and mortgage interest (if applicable). It bears mentioning that she may end up paying more tax on the net rental income than you would save on the tax credit…

Continue Reading On moneysense.ca »

Getting a great Insurance policy within Canada can be tricky – let us help! Visit our Insurance page for the latest advice and articles.

Share