There are a couple of options available to you and your partners. First, I do not recommend that you incorporate a Canadian company to be the beneficial owner of the condos, because Canadian corporations pay a high rate of tax on net rental profits – 50%!
Option 1 – Family Trusts
Each family should create a separate family trust. I understand that there are two families involved, and so two separate family trusts would be created. Each Family Trust will be listed as an owner of the property.
The benefits of a family trust are as follows:
Minimization of estate taxes on death
Income splitting with family members
Passing on your wealth to the next generation tax-free
Note that a joint venture agreement should be prepared, whereby each family member is a member of the joint venture. The joint venture will contain details on the profit sharing between the members, responsibilities of each member, and the conditions surrounding the sale of the properties.
Option 2 – Bare Trustee Corporation
A bare trustee corporation could act as the ‘bare trustee’, such that it is holding the properties in trust for the beneficial (i.e. ‘real’) owners of the properties. The beneficial owners could be the individual adult family members OR the family trusts.
The benefit of having a bare trustee corporation is to limit the liability of the family members in the event of a tenant lawsuit or other lawsuit pertaining to the property. A joint venture agreement should still be prepared.