The principal residence is an important asset to consider in most Canadian estate plans. This is not surprising since, for couples who are home owners, their home is not only a place to build their lives together, but also often one of their key investments. In law, the “principal residence” can be a multidimensional concept. A family lawyer, particularly one who practises in Ontario, would think of a client’s “matrimonial home” when presented
with the term. An estate planning lawyer, although entirely mindful of the family law implications surrounding a person’s “matrimonial home”, would nevertheless be more likely to consider the property law implications of the principal residence, namely how it is held and whether it will be part of the estate of a particular owner. There is also a question of whether more than one property might qualify as a “principal residence” for tax purposes. This would be top of mind for a tax lawyer, who would want to determine which of a client’s multiple properties should be treated as a “principal residence”, in order for the best tax result to be achieved on a sale or deemed disposition arising on death.
This article discusses ownership of the principal residence by married spouses and the implications of different types of ownership from a tax, property and succession law perspective.
By Rahul Sharma and Jennifer Corak of Miller Thomson LLP.