If you're not designating your house as an income property, CRA won't know. I think you're over complicating it.

Interesting. Thanks for your response. Don't you need to live in your principal home to be exempt from capital gains when the house is sold?

Yes. Changing or adding names to title will result in land transfer tax.

Just swap houses without doing anything to title. When your parents pass, you'll likely inherit the house anyways.

Good example of why transfer taxes are BS.

Let's say parents have a bigger home than their adult child and the parents want to downsize to the adult child's home. Likewise, the adult child wants to upgrade to their parents' home. This will avoid RE fees. Will there be land transfer tax if they do this transaction?

House swap. Changing titles, Land Transfer fees, etc