There's a lot of press right now about new rules for reporting of bare trusts in Canada.
- CRA info: https://www.canada.ca/en/revenue-agency/services/tax/trust-administrators/t3-return/new-trust-reporting-requirements-t3-filed-tax-years-ending-december-2023.html
- news article suggesting parents who cosign their kid's mortgage have created a bare trust: https://globalnews.ca/news/10363565/new-bare-trust-reporting-requirements-tax-season-2024/
- article trying to explain the situation: https://www.advotaxlaw.ca/post/a-basic-guide-on-bare-trusts-for-canadian-taxpayers
I have read that if the trust has a value less than $50,000 it is not necessary to report it. But I am not sure how to determine the value of the trust.
The real estate examples are all "an entity puts a property in their name so people don't know who the developer is until development starts" or "a person moves their parents' house into their name so the parent doesn't have to deal with things and/or to make inheriting the property easier." I cannot find any examples where a parent who is co-signing (the scenario the news article referred to) and is put on title at 1% ownership or some other nominal amount is creating a bare trust. But if they are, would the value of the trust be the entire piece of real estate (eg, $500,000) or their share of it (eg $5,000 in the case of owning 1%)?
It's clear that if you nominally own a whole house, but someone else lives in it, maintains it, makes the mortgage and property tax payments on it, etc, that's a bare trust. I am not arguing about that. What I want to know is whether owning 1% of a house, at the request of a lender, constitutes a bare trust. And if it does, whether the value of the trust is the value of the house, or of the 1%?
