Any problems with demolishing a house and gifting the land to a child?
I want to gift my cottage to my daughter so she can build a full time residence. Since this is a second property I understand I will have to pay capital gains on the fair market value. I have already gotten an official appraisal, and about half the value is allocated to the existing building. Since my daughter intends to demolish the house and build a new one. Could I demolish the house and then gift the property? Doing this would reduce my capital gains by almost half. Are there any problems with this idea? Will the CRA accept this? Would there be permit problems? I.e. do you need a full plan to build a new home to get a demolition permit? If so, can I file the plan for the new house, demolish the existing then transfer the permits (paying whatever fees are required) to my daughter? If the new build relies on "or as existing" clauses in the zoning regulations, could the transfer after demolishing the existing home, cause these clauses to no longer apply? i.e. because there was no existing home when the transfer of ownership occurred, you can no longer be grandfathered in the zoning requirements? Thanks for your insights!