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The process of buying and selling property can be confusing, and transferring property comes with its own set of rules and requirements.
If you own real estate and want to transfer it to someone else, you’ll need to change the title on the deed to reflect that. There are 2 main ways to do this — a quitclaim deed and a warranty deed — and the one you choose depends on who you’re transferring the property to, why you’re doing it, and what kind of tenant you are.
To transfer property smoothly and successfully, follow these steps:
When you’re transferring ownership property, you’ll typically need to fill out two forms:
You can get these forms from your local recorder’s office.
The person transferring property ownership is the grantor, or the seller. The person receiving it is the grantee, or buyer.
To sign over property ownership to another person, you’ll use one of two deeds: a quitclaim deed or a warranty deed.
This transfers any ownership interest the grantor (seller) has in the property, but it doesn’t make promises about whether the title is good and if anybody else owns the property. Basically, it says, “I’m transferring to you whatever interest I have in this property, but I’m not guaranteeing anything about this claim.”
When you sign a quitclaim deed, you’re effectively giving up — aka quitting — your claim or rights to the property. No money or warranties are exchanged, so it offers a pretty low level of buyer protection. Since they’re risky, quitclaim deeds are usually used to transfer property among family members or between spouses after a divorce. They’re also used to clear up title issues, transfer property to a trust and gift property to someone.
As a seller, it safeguards you from being sued by your family member, spouse or future buyer later if it turns out there’s an issue with the deed or you didn’t have full ownership of the house.
Quitclaim deeds are often, mistakenly called “quick claim” deeds for their speed and simplicity. While that’s incorrect, it’s useful when trying to wrap your head around the concept.
This property transfer comes with legal assurances. It states that you, the seller, have the right to transfer the property and explicitly says that nobody else owns it. It also asserts that there are no debts or liens on the property. In other words, a warranty deed says, “I promise that I’m the rightful owner of this property, and the title to it is good.”
Warranty deeds are typically used for real estate sales. They legally protect buyers from title challenges. Unlike quitclaim deeds, someone who signs a warranty deed knows they won’t face unpaid taxes or creditor liens later down the line.
Back to topThey’re both forms of property co-ownership. When 2 or more people purchase property together, the attorney asks how they will hold title: as joint tenants or tenants in common.
Joint tenants have equal shares of the property with the same deed and at the same time. This type of holding title is common between married couples and family members. It can be broken if one of the tenants transfers (or sells) their interest in the property to another person. At that point, the title is converted to a tenancy in common.
With tenancy in common, the owners may have different ownership interests. For instance, Tenant 1 might own 50% of the home, while Tenant 2 and Tenant 3 each own 25%. Tenancies in common can also be granted at different times. To use the same example, Tenant 3 might obtain interest in the property years after the others signed off on the title. A tenancy in common can be broken if one or more of the co-owners sells their stake or buys out another tenant’s interest in the property, or if the property is sold.
While joint tenants and tenancy in common are similar in that the co-owners have rights and duties to the property, the key difference revolves around what happens when a co-owner dies.
When a joint tenant dies, their interest in the property is automatically — and equally — transferred to the surviving owners — the right of survivorship.
Tenants in common have no rights to survivorship. They don’t inherit any shares after a co-owner’s death. The deceased tenant’s interest in the property passes to their heirs or the people named in their will.
Transferring your rights to a property doesn’t mean you’re off the hook with fees and charges. While they vary between provinces and territories, be prepared to pay the following fees:
There are a few situations where you may be able to reduce fees and charges associated with a land transfer.
Every province charges a land transfer tax except Alberta and Saskatchewan, which charge a relatively small fee instead. While land transfer taxes often end up costing several thousand dollars, the fees charged in these provinces often run between several hundred and a couple thousand dollars.
In Alberta, the fee has two components as follows:
For example, if a home valued $350,000 was purchased for $325,000 (all of which was paid for with a mortgage), the land transfer fee would end up costing $120 for the property value component plus $115 for the mortgage component. In this case, the total fee would equal only $235.
In Saskatchewan, the fee you pay falls into one of 3 tiers based on the purchase price of your property:
So, if a $350,000 home was purchased for $325,000, the fee would be 0.30% of $350,000, which is $1,050.
If you’re a first-time home buyer, you may be able to get a refund on part or all of the land transfer tax you paid, depending on where you live. Often times, this benefit is only available to those who have never purchased a home anywhere in the world, not just in Canada. There may also be a limit on the amount that can be refunded.
Location | Maximum refund amount | Partial refund details | Applying for the refund |
---|---|---|---|
British Columbia | $8,000 | Refund will be given proportionate to the interest owned by applicant(s). |
|
Ontario | $4,000 | Refund will be given proportionate to the interest owned by applicant(s). |
|
Prince Edward Island | $2,000 | No partial refund available |
|
The City of Toronto, Ontario | $4,475 | (Unavailable) |
|
No, transferring a deed to another person doesn’t remove your responsibility to pay the mortgage on the property. As the original owner, you’re still obligated to make the payments to your lender — even if you’re divorced and don’t have an interest in the property.
The only way to free yourself from the mortgage is if the new owner is approved for a loan to pay off your lender’s lien on the property.
How to remove someone from a property deed
No, once the quitclaim deed is signed, notarized and recorded with the county office, it’s a legally binding document. You can’t cancel it unless you can prove in court that the deed was the result of fraud, threats or illegal pressure. If you go down that route, you’ll need an attorney.
While a quitclaim deed can’t be nullified, if the seller agrees to take back the property, the buyer can draft and file a new quitclaim deed. This voids the first deed and returns the property back to the original owner.
Your property is an asset, and transferring ownership can be time consuming. There are a few paths to take, but quitclaim deeds are commonly used to turn over any interest you have to a trusted person, like a family member or friend.
To learn more about the ins and outs of property ownership, check out our comprehensive guide to mortgages.
Back to topA complete guide to US mortgages for Canadian citizens.
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