Published at 6 October 2025

Buying or Keeping a Principal Residence: A Smart Legacy Strategy

As retirement approaches, many homeowners consider downsizing their home — a smaller space, less maintenance, simpler living. But before selling, it’s worth asking: what if keeping (or even buying) a larger principal residence could actually be more beneficial — not only for you, but also for your heirs?

The Capital Gains Exemption in Canada

One of the most overlooked advantages in Canadian estate planning is the principal residence exemption. This unique tax benefit allows a home designated as a principal residence to be transferred to heirs without capital gains tax on the appreciation.

For families, this means significant tax savings on inheritance — often translating into hundreds of thousands of dollars preserved rather than lost to taxation.

A Tangible and Emotional Asset for Heirs

Beyond financial considerations, a home carries stability, continuity, and emotional value. Unlike purely financial investments, it’s a tangible asset heirs can:

      • Keep as a family home,
      • Rent for income,
      • Or sell when it suits their own life stage.

For many families, a home also represents memories, identity, and belonging — qualities that make it more than just a financial transaction.

Real Estate as a Wealth-Building Lever

A well-chosen property in a strong market becomes a long-term growth engine. Real estate values often rise steadily, creating a wealth multiplier effect that directly strengthens the estate. For affluent families, this can be one of the most effective wealth transfer strategies available.

Tailored Succession Planning

Of course, this isn’t a one-size-fits-all solution. Costs like property taxes, maintenance, and liquidity constraints need to be factored into a comprehensive estate plan. For some, keeping a larger property may be the right move; for others, a smaller residence may better align with lifestyle and financial goals.

At Investamp, we specialize in helping families evaluate these decisions with clarity and foresight. Our role is to integrate real estate into a tax-efficient succession plan, balancing lifestyle, legacy, and financial impact.

 

A house isn’t just a place to live — it can be a powerful estate planning tool. Thanks to Canada’s principal residence capital gains exemption, maintaining (or acquiring) the right home can provide both comfort in the present and a smarter inheritance for the next generation.

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