Selling Your Home to a Family Member in Ontario: What Should You Know?

Short answer: you can sell your home to a child, parent or sibling in Toronto, Hamilton or anywhere in Ontario, but the price matters more than people expect. Canadian tax rules generally look at fair market value for sales between relatives, so an independent appraisal is the simplest way to set a fair price and keep a record of it.

Why Fair Market Value Matters in a Family Sale

Under the Income Tax Act, relatives are generally considered not at arm's length. That means CRA doesn't assume the price you agree on reflects the market. Instead, tax rules often substitute fair market value, the price the home would likely fetch between unrelated people on the open market.

Lenders, land registry paperwork and other family members may also care about the price, so it pays to get it right from the start.

Can I Sell My House to Family for Less Than It's Worth?

You can, but it can create an unexpected tax cost. When you sell to a related person for less than fair market value, the rules generally treat you as having received full fair market value, while the buyer's cost stays at the lower price they actually paid.

The result can be the same gain taxed twice: once on your side now, and again on your family member's side when they eventually sell. The reverse also applies in a different way: if a relative pays more than fair market value, their cost for tax purposes is generally limited to fair market value.

Families often still want to help each other. Many choose to sell at fair market value and treat part of the price as a gift, but the right structure depends on your situation. Talk to your accountant and lawyer before you sign anything.

What If the Home Is My Principal Residence?

If the home has been your principal residence for every year you owned it, the principal residence exemption may shelter your gain. Even then, the price matters for your family member, because what they pay generally becomes their starting cost for their own future sale. If the home is a rental, cottage or second property, a taxable gain is more likely.

How Do I Set a Fair Price When Selling to Family?

An agent's opinion is a common starting point, but in a family sale nobody is testing the price on the open market. That's where a pre-listing appraisal helps. It gives both sides a fair market value from a designated appraiser with no stake in the deal, prepared to the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP).

• It keeps the conversation fair between the buyer, the seller and other relatives.
• It gives your accountant a supported value for the tax return.
• It provides a record if CRA, a lender or another family member asks later.

Our guide on appraisals vs. agent opinions explains the difference in more detail.

What Paperwork Is Involved?

A family sale still needs a proper legal transfer. Expect to involve:

• A real estate lawyer for each side, ideally, to prepare and register the transfer of title
• Land transfer tax, which generally still applies, plus the City of Toronto's municipal land transfer tax for Toronto homes; your lawyer will calculate it
• The buyer's lender, if they need a mortgage; lenders usually order their own appraisal
• Your accountant, to report the sale correctly on your tax return

How Much Does an Appraisal Cost?

At Best Home Value, an appraisal of today's value starts at $370 for a condo or townhouse, $475 for a detached or semi-detached house and $700 for a 2–4 unit property in the Greater Toronto and Hamilton Area. If the transfer already happened, a past-date appraisal starts at $470, $575 or $800. Your exact fee is confirmed in writing within one business day, before anything is booked. See our full fee table.

How long does it take?

Most reports are delivered as a signed PDF within 2–3 business days of the inspection, ready to share with your lawyer and accountant.

Related Articles

• Appraisal vs. an agent's price opinion: what's the difference?
• The principal residence exemption, explained simply
• Buying out your spouse: how is the price set?

This article is general information, not tax, legal or financial advice. Please speak with your accountant, lawyer or lender about your situation.