Legal & Tax | Structures
Bare Trust vs Partnership vs Co-Ownership
There are four legal structures BC multiplex JVs actually use. The right one depends on PTT exposure, GST treatment, liability tolerance, and what your lender will accept. This page is the side-by-side comparison.
Structure Comparison
Bare Trust
Title Held
Trustee holds legal title; beneficial owners direct the trustee
GST Treatment
Beneficial owners are taxed directly; JV election simplifies reporting
PTT Exposure
No PTT on subsequent transfers of beneficial interest if properly documented
Liability
Trustee liability is limited if bare trust is genuine and documented before title
Lender View
Lenders accept but demand to see the trust and beneficial owner covenants
Best For
Pre-construction holds, passive title nominees, clean tax passthrough
Partnership (General)
Title Held
Partners hold jointly, or through a nominee
GST Treatment
Partnership is its own GST registrant; ITCs flow through
PTT Exposure
PTT payable on initial acquisition; watch for dissolutions
Liability
Unlimited joint and several liability for all general partners
Lender View
Straightforward but all partners usually sign personal guarantees
Best For
Small active deals with all partners aligned and comfortable with joint liability
Limited Partnership
Title Held
LP holds via GP; LPs are passive
GST Treatment
LP is the GST registrant; ITCs flow through the GP
PTT Exposure
PTT on acquisition; transfer of LP units typically does not trigger PTT
Liability
LPs limited to their capital; GP has full liability (usually a corp)
Lender View
Accepted for larger deals; CMHC is comfortable if GP is credible
Best For
Passive capital partners, multi-investor capital stacks, larger builds
Co-Ownership / TIC
Title Held
Each co-owner holds a fractional undivided interest on title
GST Treatment
Each co-owner is a separate GST registrant; elections required
PTT Exposure
PTT on acquisition; partition risk if one owner forces sale
Liability
Each co-owner liable only for their own obligations
Lender View
Workable for 2-3 owners; lenders dislike partition exposure
Best For
Family deals, simple two-party land contributions
Best For
- ✓ Anyone choosing a structure for the first time
- ✓ Lawyers briefing clients on options before drafting
- ✓ Lenders confirming the entity matches the loan structure
Usually Fails When
- ✕ You pick a structure based on what worked for a friend
- ✕ You ignore PTT or GST consequences
- ✕ You assume the lender will accept any entity
What To Verify Before Spending Money
- → Tax advisor confirms the structure before incorporation
- → Lender pre-screens the entity before drafting begins
- → All partners understand the liability profile they are accepting
BC Legal Resources
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