Corporate Nominee Real Estate Bare Trusts: 2026 T3 Reporting for Canadian Real Estate Groups

Direct answer

Corporate nominee arrangements remain one of the areas most likely to produce actual bare-trust filings for the 2026 taxation year.

Where one corporation holds registered title to real estate for the use or benefit of another corporation, partnership or investor and acts only as nominee or agent, the arrangement may fall within new subsection 150(1.3) of the Income Tax Act. If the arrangement is reportable and no specific exclusion or listed-trust exception applies, a T3 Trust Income Tax and Information Return and Schedule 15 may be due by March 31, 2027 for a December 31, 2026 year-end.

The revised legislation provides meaningful relief for family and principal-residence arrangements, but many corporate real estate nominee structures do not fit those individual-focused exclusions.

For the complete framework, see our pillar guide: 2026 Bare Trust Reporting Rules in Canada: Who Must File a T3 by March 31, 2027?

Why real estate groups should review nominee structures now

Nominee corporations are common in Canadian real estate. A corporation may be registered on title to an apartment building, commercial property, development land, a leasehold interest or other real property used by a partnership or joint venture. The beneficial owner may be another corporation, a partnership, a group of investors or another entity.

There may be good commercial reasons for the structure: lender requirements, land-registration considerations, separation of legal title, privacy, historical transactions or administrative convenience. For income-tax purposes, however, the core question is not why the structure was created. It is whether the registered owner is holding property for another person’s use or benefit as an agent under an express trust.

The 2026 definition is more precise than the old rule

New subsection 150(1.3) focuses on an express trust where one or more persons have legal ownership of property held for the use or benefit of another person or partnership, and the legal owner can reasonably be considered to act as agent for that person or partnership.

A written declaration of trust or nominee agreement can make that relationship much easier to identify. Typical wording may say that the nominee has no beneficial interest; holds legal title only; must act on the beneficial owner’s instructions; cannot sell, mortgage or otherwise deal with the property independently; and must transfer title when directed. Those features are consistent with the concept CRA describes as a bare trustee. But the legal characterization still depends on the actual agreement, conduct and applicable private law.

Why the $250,000 exception often does not help corporate nominees

The general $250,000 listed-trust exception in paragraph 150(1.2)(b.1) has several conditions. One is especially important for corporate nominee arrangements: each trustee must be an individual. A corporation acting as bare trustee therefore generally cannot rely on that particular $250,000 exception. Even if the property value is below $250,000, the corporate-trustee condition can end the analysis.

The $50,000 exception is different. It does not contain the same individual-trustee condition, and under the revised legislation it is no longer restricted to particular asset types. In practice, however, most Canadian investment real estate will exceed $50,000 throughout the year. This is one reason corporate nominee real estate arrangements are more likely than many family arrangements to produce actual 2026 filings.

The principal-residence exclusions generally do not fit

The bare-trust-specific principal-residence exclusions are designed around individuals and family relationships. A corporate nominee holding an apartment building, warehouse, office building, development property or rental property will ordinarily not fit those provisions. That leaves the arrangement to be tested against the remaining statutory exclusions and listed-trust exceptions.

The partnership exclusion: Useful but narrower than many expect

Paragraph 150(1.31)(d) provides a specific exclusion for certain property held for a partnership. Broadly, it requires the property to be held throughout the year solely for the use or benefit of the partnership; each legal owner to be a partner of the partnership; and the partnership information-return condition to be satisfied.

Two points matter. First, each legal owner must itself be a partner of the partnership. A separate nominee corporation that is not a partner will generally not satisfy that condition. Second, the required partnership information-return condition must also be met. The exclusion can therefore provide meaningful relief where a partner holds legal title for the partnership, but it is not a blanket exemption for every nominee structure involving a partnership.

Consider two structures.

Structure A — A partner holds title. A partner in the partnership is on title to the property. The property is held solely for the partnership and the T5013 information-return condition is met. The specific partnership exclusion may apply.

Structure B — Separate nominee corporation holds title. A corporation that is not itself a partner is registered on title for the partnership. The statutory condition that each legal owner be a partner may not be satisfied. The fact that the beneficial owner is a partnership and files a T5013 does not, by itself, cure that problem. This distinction is particularly important for older real estate structures where title was intentionally placed in a special-purpose nominee corporation outside the partnership chain.

Joint ventures are not partnerships just because the parties use the word “JV”

A joint venture and a partnership are not interchangeable legal concepts. The partnership exclusion in paragraph 150(1.31)(d) refers to a partnership and ties into the partnership information-return rules. A nominee holding property for a contractual joint venture therefore needs a separate analysis. Do not assume that a T5013-style partnership exclusion applies to an arrangement merely because participants describe the project as a “joint venture.”

One nominee corporation can have multiple bare trusts

A corporation may hold title to many properties for different beneficial owners. The number of legal titleholders is not necessarily the number of bare trusts.

Example: NomineeCo holds title to 20 properties — 5 for Corporation A, 4 for Corporation B, 6 for Corporation C, and 5 for Corporation D. Depending on the legal arrangements, there may be four separate bare trusts rather than one trust or 20 trusts. The key is the underlying trust relationship — who the settlor and beneficiary are, what property is governed by the same arrangement, and whether the legal terms create one or multiple trusts. Where a nominee holds properties for 12 different beneficial owners under separate declarations, there may be 12 separate filing obligations. This is why real estate groups should inventory nominee arrangements before filing season rather than simply search the general ledger for “trust” accounts.

What if the nominee files a nil T2?

Some nominee corporations historically file a nil corporate income tax return because they are registered corporations but do not beneficially earn the rental income, capital gains or other property income. That nil T2 does not replace a required T3 bare-trust return. The corporation and the bare trust are different reporting concepts. If the corporation acts as trustee of a reportable bare trust, a T3/Schedule 15 filing obligation can exist even though the corporation’s own T2 is nil. Conversely, filing a nil T2 does not by itself prove a bare trust exists. The legal arrangement must still be reviewed.

What if there is no written declaration of trust?

A written agreement is often present in commercial nominee structures, but not always. The absence of a written declaration does not automatically establish that no trust exists. Nor should a tax preparer create a declaration after the fact merely to make the filing easier. The 2026 rule requires an express trust under applicable law. The parties’ intention, original transaction documents, legal-title arrangement and conduct all matter. If the legal relationship is unclear, legal advice may be appropriate before a tax filing takes a definitive position on beneficial ownership.

What has to be filed?

Where a corporate nominee arrangement is a reportable bare trust and no exception applies, CRA’s current guidance contemplates a trust account number; T3 trust code 307; a T3 Trust Income Tax and Information Return; and Schedule 15, Beneficial Ownership Information of a Trust. Schedule 15 generally reports trustees, settlors, beneficiaries and controlling persons. For corporate entities, business-number information may be required. The T3 is largely informational for a bare trust; income, capital gains and capital losses from the property generally continue to be reported by the beneficial owner.

What about the property itself?

The current Schedule 15 is focused primarily on the people and entities connected to the trust rather than a detailed asset schedule. That does not mean property details are irrelevant. Property value still matters. It can determine whether the $50,000 exception is available and can be relevant to potential penalty exposure. The $250,000 exception is generally unavailable where the trustee is a corporation because that provision requires each trustee to be an individual. Property identity and ownership history also matter in determining whether multiple assets belong to one trust or several. Keep sufficient records even if the form does not ask for every property detail.

Penalty exposure can be material for real estate

For a late T3 with no unpaid tax, the ordinary late-filing penalty is imposed under subsection 162(7) of the Income Tax Act and, as CRA describes it, is $25 per day, subject to a $100 minimum and $2,500 maximum.

The larger concern is the gross-negligence/knowing-failure penalty under subsections 163(5) and (6). That penalty is the greater of $2,500 and 5% of the highest total fair market value of all property held by the trust at any time in the year. For a trust holding a $5 million commercial property, 5% is $250,000.

That does not mean every missed bare-trust return attracts a $250,000 penalty. The statutory standard requires knowing conduct or circumstances amounting to gross negligence. But it explains why real estate groups should not treat bare-trust screening as a low-risk clerical exercise. A documented review before the filing deadline is materially better than trying to reconstruct the structure after CRA asks questions.

Real estate group checklist

Before the end of 2026, consider preparing a nominee-ownership schedule showing, for each arrangement:

1. Registered legal owner — who appears on land title?
2. Beneficial owner — who funded the acquisition, receives income, claims CCA where relevant, bears expenses and is entitled to sale proceeds?
3. Trust / nominee document — is there a declaration of trust, nominee agreement, agency agreement or other governing document?
4. Date created — when did the arrangement begin? Could the less-than-three-month exception matter?
5. Property value — did total FMV remain below $50,000 throughout the year? For real estate, usually not.
6. Partnership status — if the beneficial owner is a partnership, is every legal owner actually a partner? Is the required partnership information return filed?
7. Number of distinct trust relationships — does one nominee hold property for multiple beneficiaries under separate arrangements?
8. Existing CRA trust numbers — was a T3/trust account created in 2023 before CRA announced administrative relief?
9. Schedule 15 information — do you have the required names, addresses, countries of residence and tax identification numbers for all reportable entities?
10. Responsibility — who will prepare, approve and file each return before March 31, 2027?

FAQ

Work with Lepore & Company

Lepore & Company provides 2026 Bare Trust Review and T3/Schedule 15 Filing services for real estate corporations, partnerships, owner-managed groups and other businesses using nominee ownership structures. For real estate groups, the highest-value work should happen before the return is prepared: map legal title to beneficial ownership, identify every nominee arrangement, determine which statutory exclusion applies, and document the conclusion.

Update note

This article reflects legislation and CRA guidance available as of September 24, 2026. CRA has indicated that further guidance will be released before the 2026 T3 filing season.

Disclaimer

This article provides general information only and is not legal, tax or accounting advice. Bare-trust characterization depends on the governing documents, conduct and applicable private law. Partnership and joint-venture structures require particular care.