5 Ways to Pay NO Taxes with Real Estate Investing in Canada. Save Millions Legally $$$
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- เผยแพร่เมื่อ 13 ก.ค. 2024
- ****DISCLAIMER:
With any and all investing you should always obtain independent legal, taxation and financial advice from a licensed professional before investing any of your own money.
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Learn how to avoid paying taxes in Canada with real estate.
Time map:
00:00 Important to understand
00:25 my mission
00:36 what makes a successful real estate investor
00:52 pay no taxes with principal residence exemption
02:01 pay no taxes by setting up a corporation
03:49 pay no taxes with a bare trust agreement
04:51 pay no taxes with TFSA
05:41 top 3 self-directed TFSAs in Canada
06:16 pay no taxes with cash-out refinance
07:15 the best way to avoid paying taxes in Canada
07:40 free value
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Darren Voros
Darren’s diverse skillset has taken him to many stages around the world. He has been featured as an on-air renovation expert on “The Goods” (CBC) and “CityLine” (CityTV). Darren was also the behind the scenes contractor on “Save My Reno” (HGTV) and “Game of Homes (W Network).
Darren is an accomplished real estate investor, trainer and coach. He controls a portfolio of properties worth just over $10,000,000 and has travelled across North America educating, inspiring and motivating audiences on the subject of real estate investing, financial independence and financial literacy. Darren’s willingness to give back prompted him to launch his TH-cam channel in 2020 in order to have a wider reach in educating investors. - บันเทิง
Basically a cash out refinance is: you buying your house from you for a higher amount, and you keep the difference tax free, did this in 2022 and had 57k in my pocket and my mortgage went up 300/m but the length stayed to what I had on the old mortgage, was worth it in my situation cause I'm rolling that into more real estate 👌
Love the videos Darren! Not many people in Canada impart such knowledge on TH-cam compared to the USA.
There’s an ejection change of use and you can claim 4 yrs plus 1 as principal residence retroactive and not pay taxes on investment property.. you can’t if it’s in a corporation .. only for 1 property I think
Good video. Wondering how the tfsa for real estate works. My current house has a basement suite and upper suite. I live in the upper right now, so it's my primary residence. However, I'm buying a new house which will become my new primary residence and I will rent the upper at the current house as well as bsmt suite. If I make mortage payments from a tfsa, does that mean the rental income would be tax exempt? I highly doubt it works like that, but that would be amazing 😊
The tfsa has a limit, what if i have multiple rentals and i go over de limit?
Thanks
What do you do with your left over cash ?
I am a bit of a noob here. So I have a question. If we want to say house hack and buy a property and I want to declare part of the rent as income to qualify for a higher loan value. Do I have to put 20% down or will it be 5% and 10% thing?
Also let's say if I have a life insurance which includes mortgage, will that extend to say if I setup a corporation..? Or we will need mortgage insurance separately?
Should I make a corporation before I buy my first investment property? Planning on renting it out. If I bought through a corporation would I be approved for less because that corporation has no financial history, or would a lender base it upon my own personal income etc. Thanks!
If I buy cash negative investment property , can I claim the loss and reduce my salaried income
New viewer here. I am hoping to get into real estate investing to build wealth and assist with an early retirement.
I look forwarding to watching the content.
You had me at "NO Taxes"
Good video but you made one mistake at the end. If you buy a property under a corporation, it can't be designated as a principal residence because it is a corporation
I'm subscribed to this channel, but this video is before I clicked the subscribe button and I only saw it today in Feb 2023. EVERYTHING Darren says is so true, I grinned throughout the video. There are many things that I have already done on my journey that have been amazing. I use self directed RRSP and TFSA accounts with RE investments in them. I look forward to using all of the available tools to ensure maximum tax efficiency and employ the best strategies.
Do you mean self-directed rrsp and tfsa accounts to buy or use in your real estate business?
@@torontoHomeRepairs Mortgages and Real estate Trusts from real estate investment companies. Mortgages are secured against property so If they fon't pay, you typically don't lose. Real estate trusts are usually comprised of multifaceted real estate investments to mitigate the risk of just being invested in one asset class. Anything you are high risk, keep outside the RRSP and TFSA so you can claim lossed if need be. You can also put money in your RRSP and have it registered and working for you, but not apply the amount you invested towards a refund. You would do this if you knew there was going to be a payout on an investment, lets say in three years. Then you would use the three years worth of RRSP input to go against the extra income. I usually have investment loan costs, which I will defer until I have a gain that I don't want to get roasted for. You could put money in an RRSP, get a tax rebate, have an investment loan cost and withdraw the amount out of your RRSP to offset the loan costs. Or you could just claim the loss and put money in the RRSP and get a bigger refund. You cannot borrow money and put it in a tax sheltered fund AND write off losses. If you always have a LOC being used for investments, that leaves you with more money for your resgistered accounts and investments in them.
As you said. Form a corporation. Can i spend money for me appointing Me as executive of corporation?
Spend money for me in buying car or yacht or travel tour for me.
Can I form offshore corporation to avoid tax?
What about the passive income tax on cooperation which is about 50% in Canada for rental income
That's 50% on the net profit which if you have a good accountant should be minimal.
Can I put the cash from cash out refi from my investment property into my principal property mortgage? Eventually paying off principal mortgage and keeping the investment property mortgage same or higher by refinancing.
Subscribed, liked and now commenting. Great video
Awesome, thank you!
I was told that if you do get extra cash when doing a refi, if you take that money even tho is debt into your personal account then you can get taxed as “income”. Also what about rental cashflow after mortgage payments? Is it taxed as income? Yes. But you can also use accelerated depreciation right?
Refinance is not income. It's tax free. Cash flow after expenses is taxable. You can absolutely use depreciation.
@@DarrenVoros ty 🙏
Please tell me if you know about it. I live in Canada for half a year and plan to invest for 10 years and save ETF funds, not to sell, only to save and collect, then I plan to go to another country where there is no capital gain tax, for six months or more (in order to change tax residence) and already in this country to sell assets and take the money to another country is it possible?
I don't think so but I'm not a cross boarder accounting expert. Talk to one and see if it's possible.
Can you do bear trust for siblings or kids ??
"when it comes to tax matters make sure you contact a qualified professional."
Would you mind sharing who these people would be?
Accountant, tax attorney, some sort of lawyer??
How much of mortgage interest can I claim as a tax deduction?
All of it! mortgage interest is always a deduction
All of the big 6 banks offer self directed TFSAs and RSPs. They offer them through their discount broker line of business. Don't open those crappy branch based TFSA & RSP plans that only offer mutual funds.
The big 6 banks self-directed options do not let you invest in Real Estate such as development projects and private lending. You have to do them through a trust company such as Olympia Trust, etc.
@@DarrenVoros great point, mainly the administration is a head ache.
Loved the information and the sense of humor !
Hey nice video, my accountant is telling me that for flipping its better to do it under personal compared to corporation and that I wouldn't be eligible for corporation since the flips im doing is minor and only major renovation is when I could use the corporation. However, all the construction cost and spending should be from the corporation. What do you say about that? Thanks
I've personally never heard this, I've held properties for about 8 years personally and there are benefits of not using a corporation, however there are corporations all over the world that buy and hold vacant real estate and don't rent out the units/houses and don't renovate them either. A house doesn't need to be gutted to be considered a flip. U can literally buy a house for 150k and sell it the next day for 200k without putting a dime into it and it's still a flip. I'd love to know their reasoning
How can I sell my property to a corporation that I own. This way I take out all my equity downpayment only and still keep ownership of my house?
It doesn't really work that way. Your corporation would still need to qualify for the purchase and in most cases they'll ask for a personal guarantee.
Great video!
Can you please do a detailed video on each one of these please ?
Thanks
Noted
@@DarrenVoros Yes Please!
Thanks! It's informative.
Glad you think so!
Hi Darren, got a question about a bare trust. Are you able to backdate the written bare trust agreement if you have a proof for it?
Good question. I'd speak to your accountant about it. I'd hate to give you the wrong advice.
Wouldn’t the cash out refi hurt my monthly cashflow?
Great question Craig. I wouldn't pull the cash unless it still had positive cash flow.
Thanks for spreading your wisdom !
Watched and liked, thanks!
Thanks Jason
This is the way.
Did I just hack the system? Ok so simple. If I sell my house to say my brother in a different city and I buy his. We both stay in the same house but we rent from each other. Oh ok can we manipulate the numbers on rent leverage tax laws and such to come out ahead? If so we could see some major shake ups in the way we borrow and rent.
Love the new production value. I was waiting for it! Great visuals and great info!
Thanks Jacob. It was money well spent.
Most valuable video I watched in 2022. :) thanks
Haha I see what you did there.
@@DarrenVoros :) I really enjoyed this video and already started TFSA maximization strategy in my welthsimple account thanks to your videos. I do have a couple of questions and would hihgly appretiate your response:
1. You mentioned 3 companies that allow self-directed TFSA - which one do you preffer?
2. Related to corporation, at what point do you think is good to incorporate? I own 2 rentals, 38k in revenu and it hits hard me with my full time job revenu.
Thanks
Half Truths and some Zero truths…..salesmen!
Ive been living in my principal residence for 15 years now. I want to convert my basement into a legal basement apartment but concern how much tax on rental income and capital gains.
Is it correct that I would have to claim the monthly rental income as
part of my personal income and will be taxed on the net rental income or gross rental income?
On capital gain tax, will I be taxed from the time I received rental income on the percentage/portion of basement apartment and at what percent?
Is it worth converting the basement into legal basement apt and lose the principal residence exemption on capiltal gain?
I’m going to sell my rental property and top up my TFSA. Would that amount I deposit in TFSA considered as taxable capital gain?
Yes
Thanks for the video very informative. I have question 🙋♀️ if possible, I have been doing ride share over 3 years minimum income around 25 k annum no other income but invest in pre con 3 years ago now apparently going to make some cap gain. I am also pretty much - in my account so if sell the condo, how do save max out of cap gain ? Thanks 🙏
If you can please help me explain what I can do according to or something better about #5 PRINCIPAL RESIDENT EXEMPTION.
I brought a house in 2017 dec for 704, sold it in 2020 for 700 due to covid job reduction and at same time the value of house went down I had a loss.
My question is do I get a tax exemption refund if yes how? Please help.
Thank you I wish I had come along your videos long ago I would have still kept my house with you #1 advise.
I have a cool BUSINESS idea and $$ but I would thrive with a partner let me know ! 🙏
Real estate is the scam and it the crime.
Keep the kids poor. Invest in horrible shelter increase the crime. I am report them the Auditor general
This some Donald Trump sh*t lol, better use it if its available though