Dear David,

I’m trying to do some estate planning. My son has recently graduated. I want to buy a second home and put it in his name in order to give him a strong start. Is this advisable? – THINKING AHEAD

DEAR THINKING: If you’re buying the home in cash, you can do whatever you choose. If there’s a mortgage associated with the purchase, it will need to be approved by the bank.

Many parents want to give their kids a leg up when they’re first starting out, but there’s good reason to be cautious at this particular stage. If the house becomes your son’s matrimonial home someday and the marriage dissolves, it’s not just his house anymore and your investment plans may not work out as intended. There’s less initial risk if he’s in a common law relationship, but even then, as time passes and if kids are involved, things get a lot more complicated.

In a scenario where your son doesn’t live in the home, there are still consequences to consider. Should he decide to sell in this case, he may end up paying capital gains as it’s not his principal residence.

Before moving forward, I urge you to seek expert tax and estate planning advice. You need to make sure your investment is secure and that you’re passing on your wealth in the best way possible.

Dear David,

I heard that the Region is offering incentives for people to create low-income rental units in their homes. Is that true? – LOOKING FOR A MORTGAGE HELPER

DEAR MORTGAGE HELPER: You heard correctly. In order to supplement the shortage of affordable housing in our area, homeowners may apply for a maximum of $25,000 in loans to establish a legal apartment (a.k.a. “Secondary Suite”) in their family home under the Ontario Renovates Program. The loan is interest-free and forgivable after 15 years (pro-rated), provided you don’t default on the program rules.

In order to qualify, your home must be single-family and valued at or below $403,635 according to the Province of Ontario (a copy of your latest property tax assessment or a tax bill must be provided). The house must be your primary residence and the only piece of real estate you own.

The standard stipulations for accessory apartments still apply, of course. Your property must be zoned to allow for a self-contained, secondary unit with its own separate entrance, kitchen, sleeping quarters and bathroom. The secondary suite must meet all existing property standards and building codes, though it may be possible to use program funding to bring in-law suites or illegal basement apartments up to code. Units funded through Ontario Renovates would have to be rented out at below-average rent, with limits set and monitored by the Region.

A full description of the program, eligibility details and application information is posted online, but it’s a little hard to find. Try visiting the Region of Waterloo website (RegionofWaterloo.ca) and search “Ontario Renovates” to find the Funding for Secondary Suites fact sheet. You can also call the Region of Waterloo at (519) 575-4400.