Thank you for your informative content. One question- you mentioned at the end even if you are due for a refinance you would still be charged a mortgage penalty when you transfer into a corporation? If your term is up with the bank and due for a refinance, there should be no penalty , no?
Hi Cherry, we just purchased a pre-construction condo under our personal names. The closing hasn't happened yet, can we still transfer the property to a corporation without paying the land transfer tax and capital gain tax?
Hi Cherry thanks for the video what is the form for election after taking the proceeds of the sale of investment property to corporation As I have registered a corporation under a operating business I bought recently and chose to purchase land and building with the proceeds under the corporation name I have also refinanced another investment property and took the proceeds to pay for the same ( the operating business under corporation now does not carry any mortgage and is fully paid )
Thanks Cherry for the good information. On #2 - capital gain tax, can I assume that if the trust agreement has been in place, this will be an non-issue given it would have always been reported under the corporation since inception. Or is there more to it even with the trust agreement?
Yes, if you have the trust agreement in place and everything has always been reported in the company's name AND that the transactions are going through the company, you likely can avoid land transfer tax. :)
Good question! It's not an easy answer. Everyone's individual goal is different, for majority of people, it does not make sense to sell the rentals to the corporations. If you want to get a definitive answer, the easiest way is to setup a consultation with our team to get better advice based on your personal situation.
Hi Alvin, it really goes back to your particular situation. Depending on what your investment strategy is with these pre-construction condo, sometimes it is better to buy them in the corp. Sometimes it is better to buy them in the personal name. Feel free to download our guide on RealEstateTaxTips.ca to get a better understanding.
Thank you for sharing. I told my lawyer to do the trust document but she said She wanted to know what trust document she should do as it has a lot of trust document types. Please advise me which trust document?
Thanks for the information! I'm separating. I will probably transfer investment properties to my name, what are the advantages to transfer them to a corporation instead?
There're many advantages to transfer the properties to the corporation, but most of them wouldn't apply to you. Transferring between spouses that are separating in Canada is tax free. Transferring to a corporation at the time of divorce makes it a lot more complicated and costly. Be sure to consult with someone that understand this area of tax before you make your decision.
Hi Cherry, We are planning on purchasing a property and renting it until we can move into it 4 years from the time of purchase. At that time we plan on selling our principal residence, paying the mortgage on the rented property, and using this as our princilat residence. What tax implication will this have? The rental property is purchased by my son and me.
There would be a taxable capital gain eventually when the new property is sold, provided you file a section 45(3) election. I would recommend scheduling an appointment with my team to review your situation in more detail and provide you a more detailed answer.
Would be interested to understand implications of doing rental business as individual renting out under 10 condos in Canada while living in Bélize or Singapore for example
Thanks Raymond. We generally don't get into non-resident's taxation as it can get quite complicated. We will keep this topic in mind for future RU-vid videos.
@@RealEstateTaxTips Thanks for your reply. I did sign up for a paid session with you on Wednesday on this exact topic. If you can’t help it would be good to get a refund and cancel the session.
Great info. Can I transfer my principal house to corporation name. I am purchasing a new property which will be my principal house and the current principal house I want to make it as an investment property and transfer the ownership from my personal name to corporation name . Can I do that ?
Possibly. Depending on your situation. We routinely have this type of consultation with our clients to map out whats best for them. If you are interested, feel free to reach out to our office at admin@cccpa.ca or call us at 416-548-4228 to schedule a consultation
Can you file an election for multiple properties? Does it all have to be done at the same time or could I do one property now and another property later?
If a person has more than1 corporation in their name, is it possible to transfer money from one corporate account to another tax free? It's so hard to understand about corporation.
Hi Nadeem, Thanks for reaching out! Although I'd love to advise, unfortunately I won't be able to do so before knowing more about your personalized situation and all the factors. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca.
hi, i bought a property for my flipping business, then i opened a corporation, my lawyer suggested that instead of transferring the land title, we do the bare trust agreement, where I hold the property in trust for my corporation, is this possible? and if yes who is going to file the tax? Is it the corporation? thank you
@@cathyjose have a conversation with your lawyer and determine the risk involved. It also goes back to the timing of your corporation. Best is to have a sit down conversation with a knowledgeable real estate accountant to advise you on the risk involved. As always, if you don't have an accountant, feel free to reach out to us at admin@cccpa.ca or call us at 416-548-4228
