Real Estate

Transfer of ownership before closing

  • Last Updated:
  • Dec 20th, 2019 4:50 pm
[OP]
Jr. Member
Nov 15, 2006
100 posts

Transfer of ownership before closing

I want to transfer the apartment that is scheduled to be closing next year to my sister, but the builder told me that the government will charge me for like 5 figures amount if I’m going to do that, the purchase price was around $350,000. I wonder why I will have to pay that much for transferring it to my family member, anyone has similar experience?
5 replies
Jr. Member
User avatar
Aug 11, 2019
175 posts
183 upvotes
Toronto
Why do you want to transfer?

The builder might be implying that your sister won't be eligible for the HST Rebate on closing and your sister would need to pay the amount upfront, and would need to submit to the CRA to claim it afterwards (can range between $20K-24K etc...)

Ask what the cost of an assignment is as well - they may be charging you for that. I've seen certain builders charge as much as $25K for those that did not have an assignment clause in their APS.

Another option is to add your sister as a co-buyer on your APS. Maybe, title it as tenants in common with you at 1% your sister as 99%. (Speak to a lawyer/accountant to see the implications of this).

(Im not a lawyer/accountant)
Full Time Realtor
GTA & Surrounding Areas
[OP]
Jr. Member
Nov 15, 2006
100 posts
Because I was only helping her to buy it when she was not in here. Now she will take over and apply mortgage on her own. Just checked with the builder there will be no charges if just to add her name. So that leads to my other question, is it possible to remove my name after closing? Will government charges her back on the feed afterwards?
Member
Nov 24, 2015
343 posts
213 upvotes
Toronto, ON
bsinsan wrote: Because I was only helping her to buy it when she was not in here. Now she will take over and apply mortgage on her own. Just checked with the builder there will be no charges if just to add her name. So that leads to my other question, is it possible to remove my name after closing? Will government charges her back on the feed afterwards?
My understanding is as follows:

Yes, you should be able to add her name to APS with the builder without any charge.
At the time of closing, your lawyer will prepare the title under the name of the person who has the approved mortgage. So if your sister has approved mortgage only under her name, it will be relatively straightforward for the lawyer to remove your name.
Deal Fanatic
User avatar
Feb 2, 2014
8586 posts
2453 upvotes
Toronto
bsinsan wrote: Because I was only helping her to buy it when she was not in here. Now she will take over and apply mortgage on her own. Just checked with the builder there will be no charges if just to add her name. So that leads to my other question, is it possible to remove my name after closing? Will government charges her back on the feed afterwards?
Why can the builder not do an amendment removing her name and adding your sister?

Simple and could be free (depending if the builder charges for this).
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Fanatic
Jul 3, 2011
5776 posts
2936 upvotes
Thornhill
So a few things, unless your builder is not allowing you to assign the property, you can do so. If they're not permitting you to assign, speak with a lawyer and ask them if either assigning or directing title is an option for you and which they would suggest.

If your sister is a first-time buyer, depending on the province she may qualify for land transfer rebate if there is one and in Ontario she would be refunded all of it and would also be entitled to the HST rebate provided that its for her personal use.

Also, if there's going to be a mortgage on the property you and she should wan to have the approval and preferably the commitment first because she isn't likely to be given a mortgage without first establishing a written commitment to purchasing the property if you assign it to her and if it's possible to be done under a direction, the builder and even the lender would probably want your name on title even if at 1% interest.

It's important then to find out exactly what prohibitions the builder has placed on you so that you can figure out the best route because if you have to take possession before transferring to her, you may not be eligible for the land transfer tax or HST rebates which makes it more expensive.

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