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Real Estate Transfer: Baby Boomers Secure Generational Wealth by Transferring Property to Children




The baby boomers are currently handing down more than $53 trillion to their heirs in one of the greatest transfers of generational wealth in history.

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Much of that fortune is in real estate, and boomers can use their properties to secure their wealth for posterity — but they have to do it right.

“Individuals with accumulated wealth often consider how best to transfer that wealth to their loved ones — and how to preserve and grow value for future generations,” said Melissa Goikhman, a New York City-based estate planning attorney and founder of Legacy Wealth Counsel. “This is where estate planning and intergenerational wealth planning meet.”


A Smartly Written Trust Is the Key To Transferring Property

You can leave property to your heirs in a will, but then the inheritance will go through a potentially long and costly legal process called probate, which you can avoid by creating a trust instead.

“As part of a comprehensive estate plan, real property may be transferred into a revocable living trust or an irrevocable trust,” Goikhman said. “The beauty of a trust is that it can be tailored to address the needs of individuals and families, including by providing constraints on distribution in the future and guidance on investment.”

Dodging probate is only one advantage of using a trust instead of a will.

“One major benefit of trust-based real estate transfers is that upon the death of the owner/grantor, beneficiaries may receive a step up in basis for the real estate that they would not achieve with a lifetime gift of real estate.”

According to the Tax Foundation, a step up in basis adjusts the value of inherited assets to their current fair market value and reduces capital gains taxes that the recipient owes on the asset.

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A Taxable Difference of $550,000 on a $600,000 House

Goikhman illustrates the point through an example of a couple named Tom and Jane, who bought their home for $50,000 in 1980.

“Their attorney drew up a revocable living trust and retitled that property into the trust, naming their son Bill as beneficiary,” she said. “When Tom and Jane passed away in 2020, the house was worth $600,000 and Bill inherited the property in trust at that base value — real property gets a stepped-up basis at the owner’s death. If Bill sells the home upon inheriting it, the capital gains tax would be calculated on the difference between sale price and $600,000.”

On the other hand, had Tom and Jane gifted the house to Bill before their deaths, Bill would face a capital gains tax on the difference between the future sale price and the original cost basis of $50,000.

“Transferring valuable real property into a trust, additionally, can provide asset protection options for future generations,” Goikhman said. “Talk to a qualified estate planning attorney to learn more about options to transfer wealth.”

The Gift Alternative

Boomers can also consider leaving property to their children as a gift.

“Gifting your property to your heirs while you’re still alive can also help them secure wealth,” said Boyd Rudy, team leader of MiReloTeam Keller Williams Realty Living. “By gifting property, you can reduce the size of your estate and avoid estate taxes. However, it’s important to keep in mind that there are limits to how much you can gift without triggering gift taxes.”

The current annual gift tax exclusion is $17,000. Anything over that is subject to taxation — but all but the wealthiest households will never pay it.

For 2023, the IRS allows a lifetime gift tax exemption of $12.92 million. If you gift a home, any value over the annual $17,000 limit is subtracted from the value of assets that the agency allows people to give away over the course of their lives tax-free. If you’ve already gifted your children something approaching $13 million, a house might put them over the edge. If not, the IRS won’t get a bite.

A Life Estate Can Keep You in Your Home After You Transfer It

A life estate is another option for boomers who dream of transferring their property to their children but don’t want to give it up or move out while they’re alive.

“With a life estate, the baby boomer retains the right to use and reside in the property until their passing, after which the heir assumes ownership,” said Up Homes owner Ryan Fitzgerald, who was featured in Realtor Magazine’s 30 Under 30. “This is a suitable choice if you wish to continue living in your home while avoiding posthumous legal complexities.”

Life estates create a kind of joint partnership between the people leaving and receiving the inheritance, and like trusts, they can keep the asset out of probate. But there are many considerations while the parent is alive and after the asset transfers after death, so work with a professional specializing in this kind of legal arrangement.

Consider a 1031 Exchange for Investment Properties

A life estate can help boomers who love the homes they’re in and want to live out their lives there. But if you’re passing on an investment property or one you use for business purposes, a section of the IRS tax code gives you a tax break for selling one piece of real estate and using the gains to buy another.

“If you’re looking to sell a property and reinvest the proceeds, a 1031 exchange may be an option,” said Dustin Singer of Dustin Buys Houses. “This allows you to defer capital gains taxes by reinvesting the proceeds into a similar property. This can be a good way to transfer wealth to your heirs while also minimizing tax liability.”



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Calgary home sales reach new May record: real estate board –



The Calgary Real Estate Board says the market hit a new May record for sales as the number of properties that changed hands reached 3,120 last month.

The board says the sales amount to an almost two-per-cent increase from last May, when sales totalled 3,063.

Despite the record, year-to-date sales are still almost 30 per cent behind where they were last May and the board says the market has still not shifted completely away from the declines seen at the start of the year.


The board says it continues to see fewer new listings than last year, with the number of properties listed on the market last month dropping 15 per cent to 3,652.

The market’s benchmark price was up almost three per cent at $557,000, while the average price pushed up roughly six per cent to $551,853.

The board’s chief economist says the numbers reflect a higher interest rate environment and recent rental rate gains, which are driving more people to seek apartment and condo units.

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Recreational homes: What to know about inheriting a cottage – CTV News



With a high number of Canadians expected to retire over the next few years, the trend of younger generations inheriting their family cottages will contribute to “major shifts” in the ownership of recreational homes, according to new research from Re/Max.

But amid rising concerns around the cost of housing, some may be wondering whether they can afford to keep their recreational home in the family.

In its 2023 Cottage Trends Report released April 27, Re/Max says Generation X is already driving the recreational housing market, partly due to the high volume of intergenerational wealth transfers. Additionally, data released by TD Bank Group earlier this year shows nearly 900,000 baby boomers are set to retire within the next three years.


According to Christopher Alexander, president of Re/Max Canada, many more families are likely to pass their cottages down to loved ones in the years to come.

“The torch has kind of been passed from baby boomers to gen-Xers, who are driving market activity right now,” Alexander told in a telephone interview on Wednesday. “[Gen Xers] are also buying cottages with the intention to pass it on to their children [and] have it as a family heirloom.”

A Leger survey commissioned on behalf of Re/Max as part of its trends report shows 56 per cent of Canadians either plan to or have already put their recreational property in their beneficiary’s name. Additionally, 74 per cent of those who own recreational properties say they feel confident they will be able to pass down their property to relatives with the proper planning.

While many Canadians appear confident in their ability to do this, a key factor to take into consideration is whether their children can afford to keep the home, said Jamie Golombek, managing director of tax and estate planning with CIBC in Toronto.

Amid a cost-of-living crisis, home affordability remains a concern for many. Canada has the highest level of household debt in the G7, a volume that has been growing “inexorably” because of rising home prices, according to the Canada Mortgage and Housing Corporation.

It’s not uncommon for families to sell a cottage to absolve themselves of ownership, Alexander said. More often than not, this isn’t because relatives have lost interest in owning the home, but because of the hurdles they confront while trying to keep it, said Peter Lillico, a lawyer with Lillico Bazuk Galloway Halka based in Peterborough, Ont.

“Parents make assumptions like, ‘the kids love the cottage and they get along, therefore there’s a cottage succession plan,’ and it’s just not,” he told in a telephone interview Thursday. “One of the main reasons that those cottages go up for sale after decades is you’ve got three kids and one of them says, ‘I can’t afford it.’”

Looking specifically at the recreational housing market, average prices remain above pre-pandemic levels today, Alexander said. Combined with elevated interest rates, “the ability to carry two properties has been more challenging in the last year,” he said.


In addition to keeping up with property taxes and mortgage costs, families will need to factor in a capital gains tax when transferring ownership of their cottage, said Lillico.

Whether parents are selling their recreational home to their children or giving it as a gift, the transfer is still considered a “disposition” by the Canada Revenue Agency, or a sale at fair market value, Lillico said. This will trigger a capital gains tax, which is a federal levy that accounts for the increase in a home’s value since it was last purchased.

In Canada, 50 per cent of the capital gain from a sale must be added to the seller’s total taxable income. The amount they will pay is based on their tax bracket. If the homeowners die before transferring ownership, this tax can be paid using money from their estate, Lillico said.

A principal residence tax exemption can allow homeowners to avoid paying a capital gains tax on profits made from selling a property if it’s their main residence. But any profit generated up until the home is designated a principal residence is still taxable, said Lillico, who has more than 44 years of experience in cottage succession planning.

“The cottage may qualify as their principal residence from that point forward, but it doesn’t wipe out capital gains [from previous years],” he told “Sometimes that will catch people by surprise.”

One way to temporarily avoid paying capital gains taxes is to place the home in a “sprinkling” cottage trust, Lillico said, a type of asset protection trust. This will allow the next generation to transfer the recreational property to their children without paying a capital gains tax for up to 21 years. Placing the property in this kind of trust will also protect the owners from third-party claims if someone were to get divorced or go bankrupt.

Being mindful of insurance fees and other costs involved in maintaining the home will help families make an informed decision on whether the next generation can afford to keep the property, or if they should sell it, Alexander said.

Golombek also recommends speaking with financial advisers to determine the tax consequences of inheriting a family cottage, as well as whether a person’s income and expenses will allow them to afford to keep it.


In addition to finances, it’s important that parents speak with their children about whether they want to inherit the recreational home in the first place, said Golombek.

“Especially if there’s multiple kids … it’s very important to have that discussion,” he told in a telephone interview Thursday. “If they don’t all want it, then you can create a lot of issues there by leaving it to them equally.”

Lillico recommends creating a legally enforceable cottage sharing agreement for those who will inherit the property before it is passed down. In writing, family members should lay out terms around access to the property, the sharing of expenses and any restrictions on transferring the home to those outside the family. He also suggests setting money aside, if possible, to cover repair costs down the road.


Most of Canada has seen a rise in the supply of recreational homes, aside from some outliers in Ontario and British Columbia, where prices are “exorbitant,” Alexander said.

Areas such as Muskoka and Prince Edward County in Ontario have seen property values go through the roof over the last few years, leading many recreational homeowners in these regions to see high capital gains over time, he said. As these markets remain hot, peripheral regions such as those further north in the province have become more attractive as cheaper alternatives.

“Within three hours of a major city, as long as the demand is there … you’re going to see property values increase and then you’ll have higher capital gains,” Alexander said. has put together a list of recreational properties currently on the market across Canada.


(Hayden Simon, Century 21 Creekside Realty)

Location: Harrison Hot Springs, B.C.

Price: $599,000

Year Built: 2002

Property Size: 189.52 sq. m

Lot Size: 0.33 hectares

Situated on the shores of Harrison Lake, this leasehold property is a two-hour drive from Vancouver. With nearly 190 square metres of living space, it includes five bedrooms and two bathrooms. The home also features a wood stove in the living area and a wood-burning hot tub in the backyard.


(Ryan Sagert, 1.m.A Media / Cathren Dorchester, Royal LePage Parkland Agencies)

Location: Rural Wetaskiwin County, Alta.

Price: $759,000

Year Built: 1980

Property Size: 78.42 sq. m

Lot Size: 0.08 hectares

This lakefront home has four bedrooms and two bathrooms, in addition to a kitchen, living room and fully finished basement. The lower level comes with heated floors and offers outdoor access. In the backyard is a fire pit, along with a stone walkway that leads to Pigeon Lake.


(Big Bay Media / Erin Monett, Chestnut Park Real Estate)

Location: Muskoka, Ont.

Price: $1,199,999

Year Built: 1976

Property Size: 165.55 sq. m

Lot Size: 1.31 hectares

Two separate docks lead the way to this four-bedroom, two-bathroom home in Muskoka, Ont. The property includes nearly 314 metres of shoreline along Green Bay, and 1.31 hectares of land. Large windows in the dining area provide a clear view of the waterfront. In addition to the cottage, a seasonal log cabin is also situated on the property.

(Carol Love, Century 21 Lanthorn Real Estate)

Location: Prince Edward County, Ont.

Price: $949,000

Year Built: 1981

Property Size: 130.06 sq. m

Lot Size: 1.09 hectares

Located in Prince Edward County, Ont., this waterfront bungalow offers views of Consecon Lake. Inside the home are four bedrooms, two bathrooms, a living room, kitchen and recreation room. In the backyard is a screened porch and deck facing the water, which can be accessed via a private boardwalk. This recreational home is located near Millennium Trail as well as shops, wineries and more.


(Christopher Green / Joel Flewelling, Royal LePage Atlantic)

Location: Annapolis County, N.S.

Price: $399,000

Year Built: 1882

Property Size: 118.73 sq. m

Lot Size: 0.25 hectares

This two-storey home has two bedrooms, two bathrooms and nearly 120 square metres of living space. On the main floor is a combined living and dining area with a wood-burning stove, as well as a sunroom. On the upper floor, both bedrooms share a full bathroom, which includes a shower.


(Odyssey Virtual / Jodi Bernard, Century 21 Northumberland Realty)

Location: Queens County, P.E.I.

Price: $499,000

Year Built: 2019

Property Size: 142.7 sq. m

Lot Size: 0.4 to 1.2 hectares

Situated on top of a hill, this cottage in central P.E.I. offers panoramic views stretching from Sea View to Park Corner. It features two bedrooms and two bathrooms, along with a kitchen and combined living and dining area. At the back of the home is a covered deck that is partially screened-in.


(Krista Trask, Century 21 Seller’s Choice)

Location: Whitbourne, N.L.

Price: $449,900

Year Built: 2020

Property Size: 228.91 sq. m

Lot Size: under 0.4 hectares

Modern finishes can be found throughout this home in Whitbourne, N.L. The open-concept layout of the main floor includes vaulted ceilings and chalet windows. Also on the main level is a gourmet kitchen with an island that can seat three people. The main bedroom has a private patio door with access to the front deck, as well as three-piece ensuite.

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Victoria real estate sales up and prices down year-over-year – Times Colonist



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Real estate prices picked up slightly in May from April, but remain below levels seen a year ago in the capital region.

The number of properties that changed hands climbed by 22 per cent in May from the previous month, indicating increased consumer confidence, Victoria Real Estate Board chair Graden Sol said Thursday, when monthly data was released.


May saw the highest number of sales since April of last year, he said.

While sale numbers lag below what would typically be expected in a spring market, May was the fourth consecutive month with sales higher than the previous month’s.

A total of 775 properties, valued at $774.9 million, sold through the board last month.

That represents an increase of 1.8 per cent from May 2022 and 21.7 per cent from April of this year, the board said.

The benchmark price for a single-family house in Victoria’s core was $1.297 million last month, a drop from $1.4 million in the same month a year ago.

Last month’s benchmark price was $1.295.8 million.

The benchmark price for condominiums in Victoria’s core slid to $569,300 in May from $619,500 a year earlier, although it was up slightly from April, when it was $564,000.

A total of 2,189 properties were for sale at the end of May, up 7.1 per cent from April, and up 23.3 per cent from the end of May last year.

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