Insights

When Is the Right Time to Make a Will? A Guide for Ontario Residents

Creating a will is one of the most important financial and legal decisions you can make. Yet, many Ontario residents delay this essential step, often believing it is only necessary later in life. With the current economic uncertainty, high living costs, and changing real estate values, now is the right time to secure your assets and protect your loved ones.

Why Now? Economic and Market Factors

Ontario’s housing market remains unpredictable, with rising interest rates and fluctuating property values affecting homeowners. If you own property, your estate plan should reflect these financial changes to ensure your beneficiaries receive the maximum benefit. A will clarifies asset distribution and can help avoid unnecessary legal disputes and tax burdens.

Inflation and economic instability also play a role. Without a proper estate plan, your family may face increased financial pressure due to probate fees, taxes, and unforeseen expenses. By planning now, you can structure your estate to minimize costs and maximize financial security for your heirs.

Risks of Delaying Your Will

Many assume a will is only necessary later in life or after accumulating substantial wealth. However, unexpected life events can happen at any age. Without a valid will:

  • The government decides how your assets are distributed, which may not align with your wishes.
  • Delays in estate settlement can create financial hardship for your family.
  • If you have children, guardianship decisions will be made by the courts, rather than someone you trust.
  • Business owners risk losing control over succession plans, potentially jeopardizing the future of their company.

Who Should Have a Will?

  • Homeowners – Rising property values make estate planning crucial.
  • Parents – Ensures guardianship and financial security for children.
  • Business Owners – Prevents legal complications and secures business continuity.
  • Individuals with Assets – Protects bank accounts, investments, and personal belongings.

With today’s economic uncertainties and rising costs, estate planning is more important than ever. No matter your age or financial status, having a will ensures that your wishes are honored and your loved ones are protected. Take the first step today—consult a qualified Ontario estate lawyer to draft or update your will.

 

Risks When Buying Investment Property in Ontario: Tips from a Real Estate Lawyer

Investing in property in Ontario can be rewarding, but it’s essential to be aware of potential risks. Here are five key risks and tips from a real estate lawyer to help you navigate them:

1. Market Fluctuations

  • Risk: Property values can fluctuate due to changes in the economy, interest rates, and local market conditions. A downturn can reduce the value of your investment.
  • Tip: Conduct thorough market research. Look at historical data and future economic forecasts. Diversify your investment portfolio to spread risk. Understand the local market dynamics and consider both long-term and short-term trends.

2. Hidden Costs

  • Risk: Beyond the purchase price, owning a property involves additional costs such as property taxes, maintenance, insurance, and unexpected repairs. These can significantly impact your return on investment.
  • Tip: Create a comprehensive budget that includes all potential expenses. Set aside a contingency fund to cover unexpected costs. Regularly review your budget and adjust as necessary to ensure you can manage all financial obligations associated with the property.

3. Legal Issues

  • Risk: Properties may come with legal complications such as liens, unresolved ownership disputes, or zoning violations. These issues can delay your purchase and incur additional costs.
  • Tip: Work with a real estate lawyer to conduct a thorough title search and ensure the property is free of legal encumbrances. Verify that the property complies with all local zoning laws and regulations. Address any legal issues before finalizing the purchase to avoid future complications.

4. Tenant Risks

  • Risk: Renting out your property can bring challenges such as dealing with difficult tenants, vacancies, or non-payment of rent. These issues can affect your rental income and overall investment profitability.
  • Tip: Screen tenants carefully using credit checks, references, and background checks. Draft a strong lease agreement that outlines all terms and conditions. Stay informed about landlord-tenant laws in Ontario to handle disputes effectively. Consider using a property management service to handle tenant-related issues.

5. Financing Troubles

  • Risk: Changes in interest rates or lending conditions can affect your ability to finance the property. High interest rates or stricter lending requirements can make it difficult to secure favorable financing terms.
  • Tip: Secure favorable financing terms early and consider locking in a fixed interest rate to protect against future rate increases. Have a backup plan in case of changes in lending conditions. Maintain a good credit score to improve your chances of obtaining favorable loan terms.

By understanding these risks and following these tips, you can make more informed decisions and better protect your investment in Ontario’s real estate market. Consulting with a real estate lawyer and other professionals can provide valuable guidance and help ensure a successful investment experience.

Toronto Vacant Home Tax Occupancy Declarations Due Before February 2, 2023

A Vacant Home Tax of one per cent (1%) of the Current Value Assessment of the property will apply to residences that are vacant or deemed vacant. Residential property is considered vacant where the property has been unoccupied for a total of six months throughout the previous year or is otherwise deemed vacant under the City of Toronto bylaw unless an eligible exemption applies.

Further to the below November 2022 SLG Update, all residential property owners in Toronto will be required to submit a Declaration of their property’s occupancy status for the prior year, even if they did occupy it in such year. The occupancy status for 2022 must be declared by February 2, 2023.

All Toronto homes that are declared, deemed, or found to have been vacant for longer than six (6) months during the previous year will be subject to a Vacant Home Tax of one (1%) percent of the Current Value Assessment (CVA) under the current UHT Act. As an illustration, if your property’s CVA is $1,000,000, the tax due would be $10,000 (1 percent x $1,000,000). As mentioned earlier, the tax is determined by the property’s occupancy level for the previous year. You will need your 21-digit assessment roll number as well as your customer number from your tax bill or property tax account statement in order to make a declaration.

Late Declarations

If your property status declaration is not made by the declaration deadline of February 2, 2023, a fine of $250 will be issued. You will have an opportunity to submit a late declaration and based on your response, you may receive a supplementary Vacant Home Tax Notice. Failure to make a declaration will result in your property being deemed vacant. Once deemed vacant, your property will be subject to the tax and you will be issued a Vacancy Tax Notice.

Fines

Being found guilty of breaking any of the following offenses will result in a fine of $250 to $10,000 for each offense, including:

  • Failure to make a Declaration as required.
  • Making or agreeing in the making of false or deceptive statements in a declaration.
  • Altering, hiding, or disposing of any records, in order to evade payment or remittance of tax.
  • Making or agreeing in the making of false entries or omission of information.
  • Wilfully, in any manner, evading or attempting to evade:
    • paying tax
    • otherwise complying with the by-law.