Ownership, financing and tax

Last reviewed October 30, 2026

How you structure the purchase affects your mortgage, your taxes when you sell, your child's future eligibility for first-time buyer programs, and your family's legal protections. This page outlines the common options. Please get advice from a lawyer, an accountant and a mortgage professional before you decide.

Option 1: Parent owns

You buy the property in your name, and your student lives there (with or without roommates).

• Financing: lenders may treat it as a second property or rental, often requiring a larger down payment. Insured (low-down-payment) mortgages are generally for homes where the borrower lives, so a purchase the borrower won't occupy typically needs at least 20% down. Policies vary by lender, so ask a broker.
• Tax on sale: if it's not your principal residence, any gain is generally a taxable capital gain. Canada's principal residence rules allow a home ordinarily inhabited by your child to qualify, but a family unit can generally designate only one principal residence per year, so designating the student home could affect your own home's exemption.
• Rental income: roommate rent is generally taxable income to you, offset by eligible expenses.
• Child's first-time status: unaffected, because your child doesn't own it.

Option 2: Child owns, with parental help

Your adult child buys the property in their name, often with a parent co-signing the mortgage or gifting the down payment.

• Financing: a student usually has little income, so lenders will look to a co-signer or guarantor. If it's the child's own home, owner-occupied financing may be possible.
• Tax on sale: if it's the child's principal residence, a gain may be exempt for them.
• First-time buyer programs: buying now may use up your child's first-time buyer status for Ontario's land transfer tax refund, and affect FHSA eligibility later. Weigh that carefully.
• Control: the property legally belongs to your child.

Option 3: Joint ownership

Parent and child own together. It can balance control and financing, but it raises legal and tax questions, including how the principal residence exemption and capital gains are split, what happens if one owner has creditors or a relationship breakdown, and how a sale is decided. Get legal and tax advice first.

Down payment and mortgage basics

• Owner-occupied (the borrower lives there): the usual minimums apply: 5% on the first $500,000 of the price and 10% on the portion above that, up to $1.5 million (see CMHC).
• Non-owner-occupied: expect a larger down payment, typically at least 20%, and confirm the lender's rules.
• Rental income: lenders may count a portion of roommate rent toward qualification.
• Stress test: applies to the borrower's qualification at a higher rate.

A mortgage broker who works with family purchases can compare lenders' policies, which vary.

Other costs to plan for

• Land transfer tax: Ontario's tax applies. London has no municipal land transfer tax.
• Insurance: a landlord or rental policy if roommates pay rent, not a standard homeowner policy.
• Property tax, utilities, condo fees and maintenance.
• City rental licensing, if applicable.

Non-Canadian buyers

Federal restrictions on purchases of residential property by non-Canadians have been in place in recent years, with specific exceptions. If the buyer isn't a Canadian citizen or permanent resident, get legal advice on current rules before making an offer.

Wills and powers of attorney

Whoever owns the property should have an up-to-date will and powers of attorney. If a parent owns a student home in their name, the property forms part of their estate, so make sure your estate plan reflects your intentions.

A simple decision sequence

1. Decide how long the family will likely keep the property, and who will live in it.
2. Meet an accountant to compare ownership options for your situation.
3. Meet a mortgage broker to see which structure you can finance.
4. Have a lawyer draft any agreements between family members, such as for joint ownership or gifted funds.
5. Then start searching.