Should You Add Your Child's Name to Your Property Deed?

Adding an adult child's name to your home as a co-owner is a common estate planning instinct — a way to ensure the home passes smoothly on death. But the legal and tax consequences are often not what people expect.

What Happens When You Add a Co-Owner

Adding your child as a joint tenant means that on your death, the home passes to them automatically by right of survivorship — outside your estate, without probate. This is the intended benefit.

But it also means that from the moment you add them, your child is a legal co-owner. They have rights in the property while you are alive. If they have financial difficulties, their interest in the property could theoretically be exposed to creditors. If your relationship with your child deteriorates, removing them as co-owner requires their cooperation.

The Capital Gains Issue

For income tax purposes, adding your child as co-owner is treated as a gift of their share at fair market value. If the home is your principal residence, the principal residence exemption can shelter any capital gain on your portion. But your child's share does not benefit from your principal residence exemption — and if they are not living in the home as their principal residence, a taxable capital gain may be created at the time of transfer, and again when the home is eventually sold.

Land Transfer Tax

In Nova Scotia, transferring a half-interest in a property to a family member may trigger provincial deed transfer tax, depending on the municipality and the circumstances. Check with your municipality before proceeding.

A Will May Be a Better Solution

For many people, simply having a valid Will that leaves the home to the intended beneficiary achieves the same result without the legal and tax complications of a co-ownership transfer. The home passes through the estate and may require probate, but probate costs in Nova Scotia are often less than the tax cost of an early transfer.

Before adding your child to your deed, speak with both a lawyer or Notary (for the legal implications) and an accountant (for the tax implications). The answer depends significantly on your specific situation.