Tax planning: Sharing
your home
Sharing a home with an unmarried partner can
complicate your tax situation, so it’s a good idea to get tax advice
before you make decisions about sharing ownership and obligations.
For example, suppose that you already have a house, and you’d like to
share ownership jointly with your partner to protect his or her right
to the property. But if you simply add your partner’s name to the title
deed, it may become a
taxable
gift.
If your partner buys half the house from you at its current market value, you
may have a taxable
capital
gain
on any profit you make on the sale.
If you’re still paying off the
mortgage,
your bank may restrict your ability to add another person to the deed
or the mortgage. Furthermore, you’ll have to keep careful records of
who pays the mortgage and property taxes, so you can determine who can
claim the tax deductions.
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