2 Brutal Tax Implications on Assignment Sales in Real Estate (DON'T DO IT!)

[@honeyurfunny]

Great video on assignment 👏

[@SohaibKhan1]

Update: The law is changed. Now HST is ONLY on the profit. Not deposit portion.

[@thedelaniumshow]

This video is bomba bro.. Love it

[@dragonslayer3804]

Thanks what if I sell asap as a resale?

[@keremc1]

Great video! The best I've seen l day. a new subscriber here

[@AZeeee]

Isn't income tax on the amount after removing hst?

[@chosen1_jd]

This is only for Canada

[@JeffWybo]

Please teach HST to all real estate agents.

[@PVRajan]

Hahah PV Rajan HST course coming soon!

[@Animal1may]

Spread to Toronto investors who thinks will sell on assignment with heavy gain 🤨

[@philipcastanon9484]

Why would you not be able to pay 13% on the 350k as a whole?

[@Carolinapetroska]

Yes very important to take into consideration the tax implication. Are you familiar with section 116 certificate of compliance for foreign sellers ? Are you in Toronto ?

[@JeffWybo]

Killed it in this video 🙌

[@PVRajan]

Thanks bro!!

[@Guyontheinternet1]

Great video and info!

[@PVRajan]

Thanks Nish! Glad you enjoyed it

[@solomonaregbe9994]

Thanks bro, well explained

[@pinkpapaya1159]

Amazing content. Can you go into details the process of assignment step by step please !

[@MukeshPatel-lf7rx]

Beautifully explained 👏👏👏

[@bradwalman9819]

This was an awesome video! I wish I found your video earlier in my two hours of browsing articles on this topic.

[@KOSMOinfinite]

Is an Assignment the same thing as a Wholsale?

[@PVRajan]

Very Close! The nature of the transaction is quite similar in nature, but with wholesaling you are typically selling resale properties so there is no HST implication. Your income however, is going to be treated as business income and will be 100% taxable (instead of 50% taxable if was a capital gain instead). However, with the right corporate tax structure, you can make sure you're tax efficient in this situation

[@thevaranyvaratharajan7940]

Thanks for your great service, and your explanation.Now a days a houses price so higher than befor(18,19, 20) very hot,.god bless you and your great service, Thank you so much, and useful content 😌

[@PVRajan]

Thank you!

[@jacj1097]

Do we have to pay agent commission as well on assignment sell? Please let me know

[@HomesByLove]

Thank you for the information. Great job

[@PVRajan]

Thanks for watching!

[@Guyontheinternet1]

Dammnmn those taxes jeez

[@PVRajan]

I know man! These implications are especially brutal!

[@saj012]

That made things so clear ! Thank youu

[@PVRajan]

Glad you enjoyed it man!

[@pumadrive4125]

Wow. Brother PV - gotta hand it to you. By far, the BEST explanation of Assignments and Tax implications ever! You have an amazing gift of being able to explain complex terms in a way the average person can understand! THANK YOU! Please keep posting these! PS: If you were a real estate investor and purchased pre-construction in a corporation and then did an assignment. Using the same example, the tax rate would be what? 16%

[@pragashgnana597]

for resale in this example, I would have to pay off $500 000 by that closing date to secure the property correct? Is that the only way? or would I need a mortgage if I'm unable to pay the $500 000 in full before the closing date?

[@shameema8388]

very informative..cleared my doubts..Awesome video..keep up your good work

[@RubanSiva]

Good information. Can you do a video on assignment on buyer side

[@PVRajan]

Thanks Ruban!!

[@jusskool]

What are the pros/cons of being the buyer in an assignment sale?

[@jacj1097]

Hi ,I like your video but you forgot to mention about agent commission on both sale .

[@delexannavaratnam9476]

Awesome video PV - such awesome content on the channel 💯

[@PVRajan]

Thanks Delexan, Glad you enjoy it! Appreciate the feedback my man

[@PatrickBenoit10]

Hey, does HST apply when you have a assignment contract and it is a "used" property? Do you charge HST to the end buyer? No one seems to have the answer for me lol

[@bldfinancial]

Really enjoyed your insights here man, keep that content coming!

[@jce8847]

Rajah, if I use my corporation to get an assignment sale, does hst remain the same and what type of taxes will the corporation will pay and what are deductible expenses?

[@PVRajan]

Jhunel, yes with a corporation the HST implication would be the exact same. However, the INCOME TAX on the gain which is treated as business income (100% taxable) will be subject to the corporate tax rate (e.g 26.5% in Ontario for non small business corporations). Which depending on what your personal income is, can be the lower tax rate.

[@jce8847]

@@PVRajan Rajah, assuming that I have a client who holds multiple contracts, is it possible to put this contracts into a trust, assuming that these assignments sales will appreciate in value, and as a result, the trust will tax itself?

[@BALLERLIFE24]

Hey Man, thanks for the video! Just had a quick question, if you buy your first residential property as your primary residence and close on. 6 months later you decide to sell it, is the profit 50% taxable or 0% because the property is my 1 & only primary residents?

[@shwetapoplay9341]

Good one !

[@BALLERLIFE24]

@@shwetapoplay9341 thank-you. Just waiting on a. Reply hopefully

[@xthebrave19x]

🔥🔥🔥🔥

[@PVRajan]

Thanks Josh!

[@shwetapoplay9341]

Can you please make a video on GST/HST rebate on new built principal residence vs rental property ? Also can you elaborate whether GST/HST included in builder price usually ? And finally how to claim it ?

[@appleswagonbrotherealone5903]

Amazing video!!!! Can you do a video on how the cash flow would work if you have a incorporated business, and you get a mortgage under your name. Would the monthly cheques from the rental property be written to the company ?

[@gabrialegunaratnam5378]

Wicked video! Very informative brother. Quick question though, so if I hold a property and live in it personally and hold for minimum 1 year after closing....when I sell it after a year of holding from closing date I am still subject to capital gains tax at 50%?

[@PVRajan]

Glad you enjoyed it brother! Yes, 50% of your gain will be taxable instead of 100%. So for example if you made 100K after selling it after having closed the property and sold it. $50k would get added to your personal taxable income and taxed at your personal tax rate.

[@gabrialegunaratnam5378]

@@PVRajan is this scenario only for investment properties or does this scenario also include primary residence?

[@PVRajan]

@@gabrialegunaratnam5378 Yes! What I am describing is for investment properties! For your principal residence you would be able to sell it after one year and claim the principal residence exemption. Thus your gain would be tax free!. However you can't then continue to activitely buy new condos and keep flipping them for profit and claiming the principal residence exemption. They CRA will come down on this.

[@niman8136]

Great video and content brother. Very clear and informative!

[@hokeypokeyhaha692]

Great video. How does this change with a wholesaling business (resale properties) when both the Assignor and Assignee are corps that are both HST registrants? Would the full HST amount get rebated at some point through ITC's? Or is HST just waived completely?

[@anshumansharma6271]

W video

[@KOSMOinfinite]

Also, when you have a chance to close with the builder much of the appreciation is gone, is it not? This video opened my eyes to the tax hit but I need to understand this all better. Assignments here in Ontario still seem to be very popular, even with the major tax hit. I am trying to figure out how to get started in RE investing.

[@PVRajan]

Typically in the scenario's I described in the video, the original buyer purchased from the builder years early. So they would purchase it from the builder at $500/sqft, by the time the construction is complete and closing is about to happen the market price is much higher (e.g $800/sqft) so you end up getting that appreciation if you close.