What Is It?
Joint tenancy is a form of co-ownership where each owner holds an equal, undivided interest in the entire property. The defining feature is the right of survivorship: when one joint tenant dies, their interest automatically passes to the surviving joint tenant(s) — outside the estate, without a will, and without probate.
This makes joint tenancy one of the most common and simplest estate planning tools for transferring property — but it comes with important tax consequences and legal risks that many families don’t consider.
How the Right of Survivorship Works
When a joint tenant dies:
- The deceased’s interest does not pass through the estate
- The surviving joint tenant(s) automatically own the entire property by operation of law
- No probate is required — the transfer is confirmed by registering a death certificate at the land registry
- The property is not subject to claims of estate creditors (though it may be subject to existing secured debts on the property)
This bypasses:
- Estate administration tax (probate fees) — up to 1.5% in Ontario
- Delays associated with estate administration
- The will contest process
Tax Consequences of Adding a Joint Tenant
Adding a non-spouse as joint tenant (e.g., an adult child): Adding an adult child to title is treated as a partial disposition at fair market value for tax purposes. You are deemed to have sold half of the property to the child at FMV. If the property has appreciated, capital gains tax may be triggered on the deemed sale.
Adding a spouse as joint tenant: Under the spousal rollover rules (s. 73(1) of the Income Tax Act), transfers between spouses are at the transferor’s ACB — no capital gains triggered. Adding a spouse as joint tenant on the principal residence has no immediate tax consequence.
At death: The surviving joint tenant acquires the deceased’s interest. For capital gains purposes, the deceased is deemed to have disposed of their share at FMV at death (triggering gains in the estate), while the survivor acquires the share at that same FMV as their new ACB.
Risks of Adding a Child to Title
- Loss of control. Once added as a joint tenant, the child co-owns the property. They can force a partition (sale) of the property in some circumstances, and their consent may be required for sale or refinancing.
- Creditor exposure. The child’s creditors may have claims against their interest in the property if the child faces bankruptcy or judgment creditors.
- Family law exposure. If the child is married or in a common-law relationship, their joint tenancy interest may be a matrimonial asset subject to division if the relationship breaks down.
- Multiple children problems. Adding only one child to title when you have multiple children may create estate disputes and inequities.
What Most People Don’t Know
- Joint tenancy vs. tenants in common. Joint tenancy has right of survivorship; tenancy in common does not (each owner’s share passes by their will or intestacy). Ensure you specify which form of ownership you intend when adding someone to title.
- A joint tenancy can be severed. Either joint tenant can unilaterally convert joint tenancy to tenancy in common — eliminating the right of survivorship — without the other owner’s consent. In Ontario, this is done by registering a Severance of Joint Tenancy on title.
- Bank accounts can be joint tenancy too. Spouses typically hold bank accounts jointly. For non-spouses, adding a joint account holder has the same right of survivorship — but tax attribution rules apply to any investment income in the joint account.
- Joint tenancy doesn’t always equal equal ownership for tax purposes. Even if title is held jointly, the beneficial ownership for tax purposes may still be the original owner’s — especially where an adult child is added for estate planning purposes only. Keep documentation of the original ownership intention.
Frequently Asked Questions
I want to add my adult daughter to my home’s title to avoid probate when I die. Will there be land transfer tax?
In Ontario, transferring a partial interest in the family home from a parent to an adult child is exempt from Land Transfer Tax only in limited circumstances. Generally, a gift of a partial interest triggers LTT on the fair market value of the transferred interest. Consult a real estate lawyer — there are structures to minimize LTT.
My spouse and I already own our home jointly. Does that mean it bypasses probate when one of us dies?
Yes — provided the ownership is as “joint tenants with right of survivorship” (as most spousal home ownership is in Canada). The surviving spouse automatically owns the home without probate. Confirm your title document specifies “joint tenants” rather than “tenants in common.”
What if I want the property to go to my children after my spouse dies, not to whoever my spouse remarries?
Joint tenancy gives the surviving spouse complete and unrestricted ownership — including the right to re-title the property with a new partner or leave it to anyone. If you want to protect the children’s inheritance, consider a testamentary spousal trust instead of joint tenancy.
I added my son to my cottage as a joint tenant two years ago. Can I reverse this?
Removing a joint tenant requires their cooperation (or a court order in extreme circumstances). You can, however, convert to tenancy in common by filing a Severance of Joint Tenancy — this eliminates the right of survivorship so your share of the cottage goes through your estate rather than automatically to your son. This does not require his consent.