Hi! Great video and explanation. QUESTION: in option 2 where you purchase the house inside the corporation, can you do a “lease to own” instead of paying rent to the corporation?
scenerio: a person is taking over businesses that gross over $500k, the person owns a home. The person owes $305k on the home and its worth $415k. If this person took over the business, sold their home to the business to rent it out,and took the difference of 305-415 for downpayment for a new residence. Is that the smartest method? What would the tax be? great video btw.
Clear and concise! Perfect. Can you also make a video on how residence is protected against getting sued in a corporation? Like why healthcare professions (Doctors, dentists etc) hedge against getting sued by putting all their money in big properties. Something like homestead exemption or something like that?
Great questions and I think this is more a lawyer question - happy to invite a lawyer that understand this Homestead Exemption to let you know. As far as I know, in Canada, the amount is relatively low. The doctor/dentists example that you mentioned aren't quite applicable here. But will definitely keep that in mind.
@@RealEstateTaxTips Thank you so much for your time. Asset protection is a huge field that relates to your channel content. Something that you might want to make videos about to further expand your content on your channel and help grow your channel more and reach wider audience. Malpractice insurance is also closely related subject in terms of Asset Protection as well and I guess they both play in tandem with each other.
Question, sorry if this was already asked: scenario 3: my partner and I are the only shareholders of a corporation. Together we own our home and declare it as our principal residence. The corporate has enough retained earnings to buy our primary residence. If we sell our PR to our corporation, will we be allowed to claim the principle residence exemption and personally retain 100% of the FMV sale to our corporation. After LTT and legal fee? My understanding is that you can not sell your PR to the corporation that you are a shareholder of. You will lose the PR sale exemption. TIA great video. 👍
Thank you for the informative video. I have a question about option 3. I am not clear how this actually frees up retained earnings from the corp. Say my primary residence is worth 1mil and I have 200k equity in it with 800k mortgage. My corp buys the primary residence and I receive 1 mil, I pay 800k back to the bank, and I am still only left with 200k to buy my next residence. The only difference is my corp acquires a real estate investment. I still do not have the ability to purchase a more expensice home. Am I missing something here ? Thank you.
If a family member such as a child was to buy the primary residence of their parents, is an appraisal all that is necessary to establish fair market value of the home for CRA purposes. Also can a parent hold the mortgage of that sale, and if so came the parent also family gift the down payment without causing a capital gain to the child?
Is it difficult to buy a property under a corporation? For example, this would be a first property purchased under a new corporation for flipping homes under 365 days. And I typically use a broker.
It is more documentation and more hoops to jump through but I have a video interviewing a Scotiabank mortgage rep and he is able to get financing for his clients in corporation.
Depending on your particular situation and the financing condition, it may be worthwhile to have a separate real estate holding company or maybe you can simply own the asset in your operating company. Everyone's situation is different and it would not be fair to give you a definitive answer without understanding your background and situation. Feel free to reach out to our office if you need further help.
Assuming you've always lived in the property as your primary residence and assuming that you didn't use it for any other purpose other than your primary residence - if you want to be certain, please speak to a qualified accountant. As always, you're welcome to have a consultation with our team if you don't currently work with an accountant.
Hi Cherry, when you set up the Corporation do you lend the corporation money personally to operate if you are doing private lending and the does the corporation have to pay you interest income for that or Dividends. Like 1 million start up earning 12% annually?
There're so many questions in this comment. Corporation provide a lot of flexibility in terms of tax planning. There're times that we opt to use corporation for private lending. How to structure a particular deal also goes back to your personal situation.- You're welcome to setup a consultation with our team to discuss your particular situation. Feel free to reach us at 416-548-4228
MOST of what you say, goes over my head, but I will keep listening, maybe one day, I'll start to get some of the information...LOL. You do a great job explaining everything. Do you do consults for people who want a second opinion on their taxes? I have an accountant, but he's not as educated on all these nuances for corporations as you are. Even though he's been an accountant for 30 years.
Hi ! I appreciate your videos, they are very helpful. If someone wants to start a rental properties business, how can he/ she arrange a video meeting with you pls? I leave in Alberta and listening to you, it’s seems that you are all the way to Ontario. Thanks
What do you think is worth it in the long run, Buying a home residence with the corporation and paying the taxes on the rent that will be owed Or taking dividends and paying it personally so we can have the tax exemption if we decide to sell
That questions has a few possible answers and they would depend upon what your long term goals are. I would recommend that you schedule an appointment with my team to evaluate your long term goals and provide you with some clarity in your decision making process.
Let's say I want to buy a house with the money inside my corporation, but knowing I wouldn't have principle residence exemption if I buy the house inside the corporation, can I form a self benefit trust and have the corporation be under my trust. When I sell the house, can I have primary residence exemption? Assuming I use the money from the corporation to buy the house? Is it possible to take the money out of the corporation and use it to buy the house under the trust? Since the corporation is under the trust, the money in the corporation should also be the trust's?
Yes you can, the is no limit in this regard you simply need to keep track of the assets and the income earned. I would recommend you schedule a call with my team to review your options and help you develop a path forward.
I own an owner occupied triplex in Quebec.. If I sell this into a coop , for the equity on fair market value do I pay tax? or I pay only land transfer tax and legal fees for the conversion of property in Quebec ?
This is a bigger question - it should be a question with your accountant to decide if it is even beneficial to sell it to the corp - only then you would do so - please do not do it based on an TH-cam video. If you sell it to a corporation, you'll have to pay capital gain on the rental portion - not the personal side unless you choose to file an eelection to defer it.
Tax implication depends on how you own it with your corporation as well. For specific advice, it's best to have a sit down consultation with your accountant. If you don't currently work with one, feel free to contact us at admin@cccpa.ca or call us at 416-548-4228
Great video!! got a question, when client wants to sell that old residence property in the corporation, the profit of appreciation is taxed as captain gain or income ?
This goes back to when they are selling it and what their intention is at the time when they sell the property. Typically speaking if the taxpayer treats it as long term rental, the sale would trigger capital gain.
Waooo! Excellent presentation . Very informative and beneficial in many ways. How can one reach you or your company for consultation?. What is your fees structure like? Well done!!!
Hello! Please reach out to our office at admin@cccpa.ca or call us at 416-548-4228 and my team can walk you through the steps required for a consultation. Thanks
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Wow loved this video! Great explanations Cherry, your clients are very lucky to have someone that explains things so well. All the best!
Glad you find it useful
Hi! Great video and explanation. QUESTION: in option 2 where you purchase the house inside the corporation, can you do a “lease to own” instead of paying rent to the corporation?
scenerio: a person is taking over businesses that gross over $500k, the person owns a home. The person owes $305k on the home and its worth $415k. If this person took over the business, sold their home to the business to rent it out,and took the difference of 305-415 for downpayment for a new residence. Is that the smartest method? What would the tax be?
great video btw.
Clear and concise! Perfect. Can you also make a video on how residence is protected against getting sued in a corporation? Like why healthcare professions (Doctors, dentists etc) hedge against getting sued by putting all their money in big properties. Something like homestead exemption or something like that?
Great questions and I think this is more a lawyer question - happy to invite a lawyer that understand this Homestead Exemption to let you know.
As far as I know, in Canada, the amount is relatively low. The doctor/dentists example that you mentioned aren't quite applicable here.
But will definitely keep that in mind.
@@RealEstateTaxTips Thank you so much for your time. Asset protection is a huge field that relates to your channel content. Something that you might want to make videos about to further expand your content on your channel and help grow your channel more and reach wider audience. Malpractice insurance is also closely related subject in terms of Asset Protection as well and I guess they both play in tandem with each other.
No one can beat you.................. What an explanation
Question, sorry if this was already asked: scenario 3: my partner and I are the only shareholders of a corporation. Together we own our home and declare it as our principal residence. The corporate has enough retained earnings to buy our primary residence. If we sell our PR to our corporation, will we be allowed to claim the principle residence exemption and personally retain 100% of the FMV sale to our corporation. After LTT and legal fee? My understanding is that you can not sell your PR to the corporation that you are a shareholder of. You will lose the PR sale exemption. TIA great video. 👍
14:51 - Why is the property still in the personal name. I thought it was bought by the corporation? Great video!
Thank you for the informative video.
I have a question about option 3. I am not clear how this actually frees up retained earnings from the corp. Say my primary residence is worth 1mil and I have 200k equity in it with 800k mortgage. My corp buys the primary residence and I receive 1 mil, I pay 800k back to the bank, and I am still only left with 200k to buy my next residence. The only difference is my corp acquires a real estate investment. I still do not have the ability to purchase a more expensice home. Am I missing something here ? Thank you.
If a family member such as a child was to buy the primary residence of their parents, is an appraisal all that is necessary to establish fair market value of the home for CRA purposes. Also can a parent hold the mortgage of that sale, and if so came the parent also family gift the down payment without causing a capital gain to the child?
Wow! I need to visit your business for a consult. From Hamilton
Is it difficult to buy a property under a corporation? For example, this would be a first property purchased under a new corporation for flipping homes under 365 days. And I typically use a broker.
It is more documentation and more hoops to jump through but I have a video interviewing a Scotiabank mortgage rep and he is able to get financing for his clients in corporation.
For option 3, you will be holding an asset under an operating company. What's the best structure to do it with holding company?
Depending on your particular situation and the financing condition, it may be worthwhile to have a separate real estate holding company or maybe you can simply own the asset in your operating company. Everyone's situation is different and it would not be fair to give you a definitive answer without understanding your background and situation.
Feel free to reach out to our office if you need further help.
to be clear, if I sell my primary residence to my corp for fair market value, there is not tax? thanks and really getting a lot from your videos!
Assuming you've always lived in the property as your primary residence and assuming that you didn't use it for any other purpose other than your primary residence - if you want to be certain, please speak to a qualified accountant.
As always, you're welcome to have a consultation with our team if you don't currently work with an accountant.
Hi Cherry, when you set up the Corporation do you lend the corporation money personally to operate if you are doing private lending and the does the corporation have to pay you interest income for that or Dividends. Like 1 million start up earning 12% annually?
There're so many questions in this comment. Corporation provide a lot of flexibility in terms of tax planning. There're times that we opt to use corporation for private lending. How to structure a particular deal also goes back to your personal situation.- You're welcome to setup a consultation with our team to discuss your particular situation. Feel free to reach us at 416-548-4228
Super disappointed that I’m just finding out about your channel now! Really informative and amazing content
Welcome aboard! Hope you find the content helpful!
MOST of what you say, goes over my head, but I will keep listening, maybe one day, I'll start to get some of the information...LOL.
You do a great job explaining everything. Do you do consults for people who want a second opinion on their taxes? I have an accountant, but he's not as educated on all these nuances for corporations as you are. Even though he's been an accountant for 30 years.
Hi ! I appreciate your videos, they are very helpful. If someone wants to start a rental properties business, how can he/ she arrange a video meeting with you pls?
I leave in Alberta and listening to you, it’s seems that you are all the way to Ontario. Thanks
What do you think is worth it in the long run,
Buying a home residence with the corporation and paying the taxes on the rent that will be owed
Or taking dividends and paying it personally so we can have the tax exemption if we decide to sell
Great explanation and video btw. Very helpful for everyone
That questions has a few possible answers and they would depend upon what your long term goals are. I would recommend that you schedule an appointment with my team to evaluate your long term goals and provide you with some clarity in your decision making process.
Let's say I want to buy a house with the money inside my corporation, but knowing I wouldn't have principle residence exemption if I buy the house inside the corporation, can I form a self benefit trust and have the corporation be under my trust. When I sell the house, can I have primary residence exemption? Assuming I use the money from the corporation to buy the house? Is it possible to take the money out of the corporation and use it to buy the house under the trust? Since the corporation is under the trust, the money in the corporation should also be the trust's?
Haha, very creative, chances are the answer is a no. :)
Can you able to hold multiple investments under the same corporation. Example stocks and real estate in same ? Thanks
Yes you can, the is no limit in this regard you simply need to keep track of the assets and the income earned. I would recommend you schedule a call with my team to review your options and help you develop a path forward.
I own an owner occupied triplex in Quebec.. If I sell this into a coop , for the equity on fair market value do I pay tax? or I pay only land transfer tax and legal fees for the conversion of property in Quebec ?
This is a bigger question - it should be a question with your accountant to decide if it is even beneficial to sell it to the corp - only then you would do so - please do not do it based on an TH-cam video.
If you sell it to a corporation, you'll have to pay capital gain on the rental portion - not the personal side unless you choose to file an eelection to defer it.
Thank you for enlightenment.
For option 2, can I co own the primary residence with my corporation and if it's possible what are the tax implications?
Tax implication depends on how you own it with your corporation as well. For specific advice, it's best to have a sit down consultation with your accountant. If you don't currently work with one, feel free to contact us at admin@cccpa.ca or call us at 416-548-4228
Thanks Cherry. Very good info
Glad it was helpful
Hey would love to sit down with you and review, I am in Mississauga. Can we connect offline?
Do I have to pay personal income tax on the dividend I received from the corporation (the 100k in this example).
Yes
Great video!! got a question, when client wants to sell that old residence property in the corporation, the profit of appreciation is taxed as captain gain or income ?
This goes back to when they are selling it and what their intention is at the time when they sell the property. Typically speaking if the taxpayer treats it as long term rental, the sale would trigger capital gain.
@@RealEstateTaxTips Much appreciated.
Great presentation, Cherry. I definitely like option 3 most. Can I open new Corporation for this or I must use only existing one?
Glad it was useful.. yes you can do either. It really goes back to your particular situation and your objective.
@@RealEstateTaxTips Hi Cherry, can I reach you directly, just to find out if I can use my Corp for buying my next primary residence? thanks
Great video
Would love to get in touch and learn more about business taxes and real estate
Thanks. You can always reach out to our office via our website at RealEstateTaxTips.ca
Love it. Thank you for this.
Thanks for watching !
Thanks for all the info!!! Respect
No problem 👍
What a great topic!😆
Thank you!
Waooo! Excellent presentation . Very informative and beneficial in many ways. How can one reach you or your company for consultation?. What is your fees structure like? Well done!!!
Hello! Please reach out to our office at admin@cccpa.ca or call us at 416-548-4228 and my team can walk you through the steps required for a consultation. Thanks
Fantastic video and very informative Cherry!
How do I get in contact with you directly or your team?
You can reach out to us via our website at RealEstateTaxTips.ca or call our office at 416-548-4228
Why is this even legal when politicians are claiming they want homes to be affordable?
I have questions how do I contact you ?
Hi, please reach out to my team at realestatetaxtips.ca/contact-us/ and we can walk through the next steps. Thanks
Instead of selling the property to the corporation, why not just sell it on the market? Owner still gets PR tax exemption.
100% - this is just for people who are interested in keeping their PR