For taxation years ending in 2025, bare trusts are not expected to file. The Canada Revenue Agency stated on 5 March 2026 that it “does not expect bare trusts to file… for taxation years ending in 2025”, and this time the legislation matches: S.C. 2026, c. 3, s. 71(10) repealed the earlier requirement for taxation years ending after 30 December 2024, and s. 71(16) applies the new narrower rule only to years ending after 30 December 2026 — leaving a deliberate gap. When the new rule starts, carve-outs in paragraphs 150(1.31)(b) and (c) cover related-individual and spousal title arrangements relating to a principal residence — but not investment property. This area has changed repeatedly; check the current position before filing.
Adding an adult child to title to avoid probate. Holding a rental property in your name for a family member who paid for it. A parent on a mortgage to help a first-time buyer qualify. All of these can create a bare trust, and for three years the question has been whether that means filing a T3 return you have never filed before.
The current answer, for taxation years ending in 2025: no. The Canada Revenue Agency stated on 5 March 2026 that it “does not expect bare trusts to file… for taxation years ending in 2025”. And the statute now matches the administrative position rather than contradicting it, which has not always been true in this saga.
Why this kept changing
The expanded trust reporting rules were meant to bring express trusts — including bare trusts — into annual T3 filing. The requirement was then deferred, repeatedly, by CRA administrative announcement while the underlying legislation stayed on the books. That is an uncomfortable position for taxpayers: relief by press release rather than by statute.
That gap has now been closed legislatively, and the dates are precise:
| Instrument | Effect |
|---|---|
| S.C. 2026, c. 3, s. 71(10) | Repealed the earlier rule for taxation years ending after 30 December 2024 |
| S.C. 2026, c. 3, s. 71(16) | Applies the new, narrower rule only to taxation years ending after 30 December 2026 |
Read those two together and you get a deliberate gap: the old rule stops, the new rule has not started, and the CRA’s March 2026 statement covers the space in between. It is the cleanest position taxpayers have had in this area since the rules were announced.
What a bare trust actually is
In substance: legal title sits with one person, and the entire beneficial interest sits with another, with the title holder having no independent power or discretion — they act only on the beneficial owner’s instructions.
Real estate examples that commonly qualify:
- A parent added to title purely so a child could qualify for a mortgage, where the child pays everything and has the whole beneficial interest.
- An adult child added to a parent’s title purely to avoid probate, where the parent remains the true owner.
- A nominee corporation holding title to an investment property for the real owners.
- One sibling on title for a property several siblings actually own.
These arrangements are extremely common in Ontario residential real estate and most of the people in them have never thought of themselves as trustees. That is precisely why the reporting rules caused so much alarm, and why the deferrals mattered.
What the new rule will carve out
When the narrower rule takes effect for taxation years ending after 30 December 2026, new paragraphs 150(1.31)(b) and (c) carve out certain arrangements — including title arrangements between related individuals and spousal arrangements relating to a principal residence.
Note what that does not cover: investment property. The carve-outs are aimed at the family-home cases. A nominee arrangement over a rental or a commercial property is a different question, and if that is your structure this is worth raising with your accountant well before the end of 2026 rather than after.
What to do now
- For taxation years ending in 2025: no bare trust filing is expected. That is the CRA’s stated position of 5 March 2026.
- Identify whether you are in one of these arrangements at all. Most people who are do not realise it.
- If the arrangement covers investment property, get advice before the end of 2026. The announced carve-outs are aimed at principal residences and related individuals.
- Check this again before you file. This area has changed more often than almost any other in Canadian tax, and a page written even a year ago is likely to be wrong.
That last point is not boilerplate. This topic has been deferred, re-announced and legislated in stages across three separate tax years. Anything you read about it — including this page — should be checked against the CRA’s current statement before you act on it.
On title to a property you do not really own, or vice versa?
Adding a parent to a mortgage, putting an adult child on title for probate, holding a rental through a nominee — these are everywhere in Ontario and almost nobody who does them thinks of it as a trust. The relief for 2025 is real, and the carve-outs coming for 2027 are aimed at family homes rather than investment property. If your arrangement covers a rental, that is a conversation to have with your accountant this year. I am not an accountant; I am flagging it because I see these structures constantly and rarely see them discussed.
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Frequently asked questions
Do bare trusts have to file a T3 return?
Not for taxation years ending in 2025. The Canada Revenue Agency stated on 5 March 2026 that it does not expect bare trusts to file for taxation years ending in 2025. The legislation supports that position: S.C. 2026, c. 3, subsection 71(10) repealed the earlier requirement for taxation years ending after 30 December 2024, and subsection 71(16) applies the replacement rule only to taxation years ending after 30 December 2026, leaving a gap between the two.
What is a bare trust?
In substance an arrangement where legal title to property is held by one person while the entire beneficial interest belongs to another, and the title holder has no independent powers or discretion, acting only on the beneficial owner’s instructions. Common real estate examples include a parent added to title so an adult child can qualify for a mortgage where the child pays everything, an adult child added to a parent’s title purely to avoid probate, a nominee corporation holding title to an investment property, and one sibling on title for a property several siblings own.
When do the new trust reporting rules apply?
To taxation years ending after 30 December 2026, under S.C. 2026, c. 3, subsection 71(16). The earlier rule was repealed for taxation years ending after 30 December 2024 by subsection 71(10) of the same Act, which is why there is a gap covering the 2025 and 2026 years.
Will family arrangements be exempt under the new rules?
Some will. New paragraphs 150(1.31)(b) and (c) carve out certain title arrangements between related individuals and spousal arrangements relating to a principal residence. Those carve-outs are directed at family-home situations and do not extend to investment property, so a nominee or bare trust arrangement over a rental or commercial property is a different question and worth raising with an accountant before the end of 2026.
Why has this rule changed so many times?
The expanded trust reporting requirements were brought in to capture express trusts including bare trusts, and the bare trust element was then deferred repeatedly by Canada Revenue Agency administrative announcement while the underlying legislation remained in place. That left taxpayers relying on relief by announcement rather than by statute. The 2026 amendments closed that gap by repealing the old rule and setting a later start date for a narrower replacement. Because the position has shifted across three separate tax years, anything written about it should be checked against the Agency’s current statement before filing.
Related reading
- The foreign buyer ban: what it actually catches
- The Underused Housing Tax is gone — but not for 2022 to 2024
- Turning your home into a rental: the section 45(2) election
- Renting out property as a non-resident: the 25% trap
Sources
Every figure on this page traces to one of these, and each was read on 1 September 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Trust reporting requirements and bare trusts — Canada Revenue Agency. Canada Revenue Agency, statement of 5 March 2026. States that the Agency does not expect bare trusts to file a T3 return for taxation years ending in 2025. The statutory position matches: S.C. 2026, c. 3, s. 71(10) repealed the earlier rule for years ending after 30 December 2024, and s. 71(16) applies the new narrower rule only to years ending after 30 December 2026. Accessed 1 September 2026.
- Budget 2025 Implementation Act, No. 1, S.C. 2026, c. 3. Justice Laws Website, current to 21 June 2026 and last amended 14 June 2026. Sections 167 and 168 eliminate the underused housing tax and the filing requirement for 2025 and subsequent years. Section 169(1) repeals the Underused Housing Tax Act, and section 169(2) provides that the repeal comes into force on 1 January 2035, so the Act stays on the books until then. Section 90(2) enacts the new Income Tax Act subsection 215(1.2) relieving residential tenants of the requirement to withhold, deemed in force 12 August 2024. Accessed 1 September 2026.
- Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.). Justice Laws Website, read 2 September 2026. Section 45(1) sets out the deemed disposition on a change of use; section 45(2) and 45(3) provide the elections; section 45(4) deems a section 45(3) election not to have been made where capital cost allowance was claimed. The four-year limit is in paragraph (d) of the definition of principal residence in section 54, and section 54.1 removes it where an arm’s length employer relocation applies and the taxpayer moves back in, subject to a forty kilometre test. Section 212(1)(d) imposes the twenty-five per cent withholding on rent paid to a non-resident, section 215(6) makes a person who fails to withhold liable for the whole amount, and section 216 provides the election to file a Canadian return on net rental income. Accessed 1 September 2026.
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I am not an accountant, a tax lawyer or an immigration lawyer, and nothing on this page is advice about your own position. Anything that turns on your residency, your corporate structure or your filing history goes to a professional who can see the whole picture.
What I can do is read the statute and the Canada Revenue Agency’s own material and quote them accurately, with the section number and the date the source carries. Tax rules in this area change fast and a great deal of what circulates online is describing law that has since been amended, deferred or repealed. Where that is the case, the page says so. connect@jatindua.com or 437-987-1925.