30 October 2018

The report also shows that boomers are preferring money gifts amid growing mortgage rates and housing prices, as they believe their beneficiary will not be able to buy a property or get a conventional mortgage otherwise.

There are no taxes on gifts in Canada. In other words, any gifted sum will not be reported or taxed. That’s the reason why many Canadians choose to pass their wealth (or a part of it) in cash, while they’re still alive.

However, if you pass a living inheritance in the form of property or a stock portfolio, there could be a capital gains tax in case the gift has increased in value.

“For example, you have a summer home and you give it to your kids, and then you decide to sell it at fair market value,” – Golombek said. “In this case you may need to pay a capital gains tax on the difference between the price you paid for that real estate (plus all improvements), and the current fair market value. In case you just gift cash or other property which hasn’t risen in value, there will be no taxes”.