More Canadians will inherit their family home, entrenching inequality across generations | Canada Voices

Shrinking families and tepid homebuilding is paving the way to a future where homes will increasingly be inherited assets in Canada, passed down from one generation to the next.

It would mark a major shift from family homes being bought and sold, entrenching inequality across generations, with a lucky few inheriting secure housing and appreciating land wealth while others are permanently locked out. Yet this issue remains absent from Canada’s housing policy discussions, even though it is one all of us should be concerned about.

Larger, family-sized homes are becoming increasingly scarce. From the mid-1960s to the mid-2010s, Canada built 30 to 40 single and semi-detached homes for every 100-person increase in the population. In the last decade, however, this rate fell by almost two-thirds to only 13 new homes.

This decline is not solely owing to Canada’s rapid population growth, as single and semi-detached home starts have been 30 per cent below historical averages over the past decade. The combination of accelerated population growth and a shift toward building high-rise rental apartments and condos has made these homes increasingly scarce, and the loss of 22,500 of them to demolitions or conversions into multiple dwellings has compounded the scarcity.

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While Canada’s population growth rate has fallen in recent years, single- and semi-detached starts are unlikely to rebound from their all-time high in 2004.

But it is not just scarcity that will increase the likelihood that more homes will be inherited; family formations are also undergoing powerful but slow-moving shifts. Up until the mid-1970s, more than 40 per cent of Canadian families with children had three or more kids, according to data from Statistics Canada.

If a couple has three children, who each have three children of their own, that’s nine grandchildren to split an inheritance. If that couple had a home in their estate plan, they’d likely sell the home and split the proceeds among the children and grandchildren.

Today, however, single-child families are the most common form of family with kids, and the proportion of three-or-more-child families has fallen to 17 per cent. This changes not only the nature of being a parent, but also of being a grandparent, as the average number of grandchildren per grandparent has fallen from five in 1995 to four in 2017 (the latest year for which data are available).

Given the decline in birth rates, these trends have almost certainly accelerated since 2017, changing how inheritances are distributed and used. If a couple has only one child, who has only one child of their own, this leaves a single grandchild to inherit.

Shrinking family sizes makes it far more practical for an individual grandchild to inherit a house and live in it, rather than putting the home on the market.

The combined impact of the scarcity of these homes and the changing nature of families has likely already increased the number of Canadians living in homes they inherited, but, unfortunately, Canada lacks data on this phenomenon.

In the United States, the share of properties transferred through inheritance rose to 7.4 per cent from 4.2 per cent between 2019 and 2025. Much of that has to do with California’s Proposition 19 rules, which keep property taxes artificially low on an inherited home, so long as it is occupied as a primary residence within a year. (In Canada, unlike California, whether you inherit a home or purchase one has no impact on the amount of property taxes you pay.)

However, there’s also been a rise in house inheritances in the U.S. in states without these rules, and it would be surprising if Canada were exempt from these trends. While it is likely that Canada has a similar share of properties transferred this way, that figure is set to rapidly rise.

A Canada where a growing number of semi- and detached homes are heirlooms is one of increased inequality. Those lucky enough to be born into the right family have access to an increasingly scarce type of housing. Those who weren’t so lucky will need to compete in the market to purchase one, driving prices up further.

It would be a mistake to believe that a future in which detached homes are more difficult to obtain will disproportionately increase the value of other housing forms or renting. Scarcity and the cache that comes with owning one will make them more desired, not less.

None of this means that increasing density or building more apartments is inherently a bad idea; Canada desperately needs more housing of all types. But it risks creating a Canada where access to certain neighbourhoods and lifestyles depends increasingly on lineage rather than opportunity.

Mike Moffatt is the founding director of the Missing Middle Initiative and co-host of the Missing Middle podcast.