Bare trusts are far more common in Canadian real estate than most people realize. And with the CRA’s new reporting rules taking effect, many homeowners and investors are only now discovering they’ve been part of one all along.
If you’ve ever had your parents on title to help you qualify for a mortgage, or you’ve put someone else’s name on your property for financing or estate reasons, you may already be in a bare trust without knowing it. Let’s break this down in simple terms.
What Exactly Is a Bare Trust?
A bare trust is when one person (the trustee) holds legal title to a property, but all the benefits, risks, and responsibilities belong to someone else (the beneficiary).
The trustee doesn’t make decisions — they’re just holding the title. The beneficiary is the true owner in every practical sense.
Think of it like this: the trustee is only the name on paper, but the beneficiary is the one living in, paying for, or investing in the home.
Real-Life Examples in Real Estate
Here’s where bare trusts often show up:
Parents on Title for Financing
A common one in BC: a young buyer can’t qualify for a mortgage alone, so mom or dad go on title to help. The child pays all expenses and controls the property. The parents are trustees; the child is the real owner.Investor Structures
Sometimes, an investor will have a corporation or nominee company on title, while the investor controls everything. This helps with liability protection or smoother transfers.Joint Ventures or Partnerships
In a multi-party deal, one person may be on title, while an agreement outlines everyone else’s beneficial interest.Privacy Protection
Some people don’t want their names searchable on land title (think high-profile professionals, business owners, or celebrities). They’ll use a trustee to keep their ownership private.
Why Do People Use Bare Trusts?
There are practical reasons:
Estate Planning – Avoiding probate and easing transfers.
Helping Family – Parents or spouses holding title temporarily.
Tax Planning – Coordinating ownership structures.
Liability Protection – Separating title from beneficial ownership.
Investments – Making multi-owner deals easier to manage.
But here’s the catch: a bare trust is still a legal arrangement. It should be documented properly, and now it comes with CRA reporting obligations.
New CRA Rules You Need to Know
Until recently, bare trusts flew under the radar. That’s changed.
Who must report? Most bare trusts holding real estate now fall under CRA’s reporting rules.
What’s required? A T3 Trust Income Tax and Information Return (with Schedule 15) must be filed, listing both trustee(s) and beneficiary(ies).
When? Starting with the 2025 tax year (filings due 2026).
Penalties? Up to $2,500 for failing to file — and much higher if it’s considered deliberate.
Even if no money is changing hands and no income is generated, the CRA still requires disclosure.
Should You Be Concerned?
Not necessarily — but don’t ignore it. If you’ve ever had another name on your property, or your name has been added to someone else’s, you may already be in a bare trust.
The important thing is to:
Review your title documents.
Confirm with a real estate lawyer or tax advisor if your situation qualifies.
Stay ahead of CRA requirements to avoid penalties.
Final Word
Bare trusts can be incredibly useful in real estate — they make ownership more flexible, help families, and simplify estate planning. But they also come with responsibilities that many Canadians overlook.
With the CRA tightening rules, it’s important to know exactly what you’re part of. If you’re not sure, get clarity now.
If you’d like to discuss how this might apply to your real estate journey in Langley or the Fraser Valley, I’d be happy to connect you with trusted legal and tax professionals who can guide you.
My goal is simple: to make sure you feel confident, protected, and fully informed about every part of your homeownership journey.
Leonie Morris, Realtor® | Langley & Fraser Valley
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