Holding BC Real Estate in a Trust: Bare Trusts, Reporting and Transparency Rules

Families and investors often register property in one name while the benefit belongs to someone else: a parent on title for an adult child, a nominee for a company, or one sibling holding for the others. In law, that is usually a trust, and very often a bare trust.

Two separate sets of rules now reach these arrangements. BC's Land Owner Transparency Act applies when title is registered, and the federal trust reporting rules ask many bare trusts to file with the CRA starting with taxation years ending on or after December 31, 2026.

What a bare trust is

A bare trust exists when the person on title, the legal owner, holds the property for someone else and has no real discretion over it. The legal owner acts on the beneficial owner's instructions, much like an agent. The beneficial owner is the one who really owns the value, the income and the decisions.

Common BC examples include:

• A parent on title for a child. A parent is added to title, or holds title alone, so that an adult child can qualify for a mortgage or buy before they are ready to be on title themselves.
• A nominee for a company. An individual or a nominee corporation holds title for a business or an investor who prefers not to be named on title.
• Family members holding for each other. One sibling is on title, but all of them contributed and share the benefit.

The arrangement may be written down in a trust declaration, or it may be informal. An undocumented arrangement is where disputes start. If the person on title dies, separates or falls out with the family, an unwritten understanding can be hard to prove. Our article on parents helping with a down payment covers how gifts, loans and title choices interact.

BC's Land Owner Transparency Act

The Land Owner Transparency Act is in force and applies whenever someone applies to register an interest in land in BC. An interest in land includes a fee simple, a life estate and a lease for more than 10 years, among others.

• Transparency declaration. Every transferee files a declaration with the application to register, stating whether they are a reporting body, such as a trustee of a relevant trust (s 10).
• Transparency report. If title is going into the name of a trustee of a relevant trust, the trustee must also file a transparency report identifying the beneficial owners (s 12), unless title is registered in the names of all the beneficial owners (s 13). The registrar must refuse the application if a required report or fee is missing (s 14).
• Bare trusts are included. The Act defines a relevant trust to include an express trust, including a bare trust (s 1).
• Keeping it current. If a filed report no longer shows the current interest holders, the reporting body must file a new one within 2 months after it becomes aware, or reasonably ought to have become aware, of the change (s 16).

Some trusts are excluded in Schedule 2, including testamentary trusts, alter ego and joint partner trusts, charitable trusts and trusts whose trustee is the administrator of an estate. Members of the public can search the registry by name or by parcel identifier (s 35), so a transparency report can reveal the people behind a nominee holding.

This land registry is separate from the transparency register that BC companies keep for their own shareholders. Our guide to the company transparency register explains that one.

CRA reporting for bare trusts

Section 150(1.3) of the Income Tax Act treats an arrangement as a trust for filing purposes when a legal owner holds property for the use or benefit of others and can reasonably be considered to act as their agent. The legal owner is treated as the trustee, and the people with the benefit as the beneficiaries.

The timing has shifted several times. The CRA's current guidance is that bare trusts did not have to file for taxation years ending on or after December 31, 2024 and before December 31, 2026, and that it does not expect a 2023 return unless it asks for one directly. Reportable bare trusts are subject to the trust reporting rules for taxation years ending on or after December 31, 2026. For a trust with a calendar year, that means a T3 return for 2026, due in 2027.

Exceptions that matter for real estate

Section 150(1.31) lists arrangements that are not treated as bare trusts for this purpose. The ones most relevant to property owners are:

• every beneficiary is also a legal owner, and no legal owner is not a beneficiary;
• the legal owners are related individuals and the property would be the principal residence of one or more of them;
• an individual holds a home for a spouse or common-law partner and it would be the legal owner's own principal residence;
• the legal owner holds the property because a court ordered it.

Whether an exception applies depends on who is on title, who lives in the home and how the beneficial ownership is actually split. A parent on title with a child who lives in the property may fall within an exception. A nominee holding a rental property for an unrelated investor or a company generally will not. Your accountant should confirm the filing position each year.

Setting up a trust holding properly

Most problems with trust holdings come from arrangements that were never written down or no longer match what the family intends. Before a transfer, or when reviewing one you already have, think about:

• A written trust declaration. It should name the legal and beneficial owners, their shares, who pays the mortgage and expenses, and how the property is to be dealt with on a sale, death or dispute.
• The filings at registration. The transparency declaration and any transparency report are filed with the transfer, so they are part of the conveyance.
• The tax picture. Principal residence status, property transfer tax and the CRA filing all depend on the beneficial ownership, not just the name on title.
• Your lender. A lender may need to know who the beneficial owner is, and the mortgage terms should match the arrangement.
• Estate planning. The person on title should have a will that recognizes the trust, so the property is not treated as part of their own estate. Some families use an alter ego or joint partner trust instead, which is treated differently under both sets of rules.

If you already hold property in trust

If you hold title for someone else, or someone holds title for you, now is a sensible time to check the arrangement. Confirm that a written declaration exists and reflects today's shares, that the transparency report on file still shows the current beneficial owners, and whether the arrangement will need a T3 return for the 2026 taxation year or falls within an exception. Changes to beneficiaries, a death or a separation can each trigger new obligations.

Holding property for someone else? Get the paperwork right at the start

Our real estate lawyers can document a trust or nominee arrangement, prepare the transparency declaration and report that go with a transfer, and review an existing arrangement before the first CRA filing year, working with your accountant on the tax side.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.